1984 (3) TMI 47

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....s assessment claimed the payment as expenditure wholly and exclusively laid out for business. The ITO assessing the company disallowed the expenditure on the ground that the payments were made for extra-commercial considerations. The finding of the ITO was ultimately sustained by the Tribunal. On a reference, the High Court declined to interfere with the finding of the Tribunal. The income-tax assessment of Sri A. L. Goenka for the assessment year 1969-70 was completed on February 7, 1970, on a total income of Rs. 71,395. A notice was issued on March 28, 1974, under s. 148 of the I.T. Act seeking to reopen the assessment of Sri A. L. Goenka for the assessment year 1969-70 on the basis of the information received from the ITO who had pass....

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....e of Ungoed-Thomas J. in the case of Petrotim Securities Ltd. v. Ayres [1963] 41 TC 389, 400 (Ch D). " These transactions, when seen in the context of the company's trading operations, cry aloud for an explanation. " In the assessment of the company, the explanation that was given was disbelieved and the claim for deduction of the amount as having been spent wholly and exclusively for the purpose of business was disallowed. But no other material has come to light to explain this uncommercial bounty. The question that is now being raised before us is whether there is any material to believe that the amounts that were shown to have been paid to the two minor sons of Sri A. L. Goenka were, in fact, paid to Sri A. L. Goenka and the income....