2019 (8) TMI 18

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.... Madras, 'B' Bench in the assessment year 1990-91. 2.The appeal has been admitted on the following substantial question of law : "Whether on the facts and in the circumstances of the case, the Tribunal failed to appreciate that the expenditure was incurred wholly and exclusively for the purpose of business and hence allowable u/s. 37 of the Act?" 3.We have heard Mr.Venkat Narayanan, learned counsel for the appellant/assessee and Mr.S.Rajesh, learned Standing Counsel for the respondent/revenue. 4.The assessee filed its return of income for the assessment year 1990-91 declaring total income of Rs. 82,390/- on 11.01.1991. The case was selected for scrutiny, in response to which the assessee's authorized representa....

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....peal to the Commissioner of Appeals-IV (CITA), Madras, who by order dated 28.02.1995 confirmed the factual finding recorded by the Assessing Officer and on further appeal before the Tribunal, the order passed by the Assessing Officer and the CIT(A) was confirmed by the impugned order. 5.Mr.Venkat Narayanan, learned counsel for the assessee submitted that the names of the persons who have rendered services were provided to the Assessing Officer and they were summoned and statement was recorded and all of them have received service charges and shown them in their books of accounts and also disclosed it in the Income Tax Returns filed and therefore, the Assessing Officer committed an error in disbelieving the stand taken by the assessee. Re....

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....essee was utterly false. Therefore, the question of claiming deduction does not arise. 6.Reliance was also placed on the decision in the case of Commissioner of Income Tax vs. Sapthagiri Traders Ltd. and others [(2008) 305 ITR 0438 (Madras)]. In the said case, the Tribunal found that the transaction of purchase of packing material was not proved to be sham nor the price paid was proved to be different than that shown in the books and the payments were made through Cheques, there was no reason to deny deduction under Section 37(1) of the Act. In the preceding paragraphs of this judgment, we have pointed out about the various persons who were summoned by the Assessing Officer and statement was recorded. Those persons though admitted that t....

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....ced on the decision of the Hon'ble Apex Court in the case of Commissioner of Income Tax vs. P.Mohanakala [(2007) 161 Taxman 169(SC)], wherein the Apex Court pointed out that when the finding of fact arrived by the authorities below were based on proper appreciation of facts, material available on record and surrounding circumstances, it would not call for any interference. In the said case, the Apex Court pointed out that the doubtful nature of transaction and the manner in which the sums were found credited in the books of accounts maintained by the assessee had been duly taken into consideration by the authorities below and the transaction though apparent were held to be not real one. It was further pointed out that it may be the mone....