46582 on august 22 1953 and anumberher debit numbere for a sum of rs.
32213 for the assessment year 1949 50.
in the companyrse of its order the tribunal stated as follows the claim was disallowed by the income tax officer as an ex gratia payment made by the appellant to the allahabad woollen mills limited and the appellate assistant companymissioner was of the opinion that passing of the debit numbere was number a bona fide business transaction prompted by companymercial expediency.
30577 for the assessment year 1948 49 and a sum of rs.
the income tax officer therefore disallowed the amount of rs.
these additions were made under section 42 2 of the act as the income tax officer found that the shareholders of the respondent company were partners in the allahabad woollen mills which functioned as a firm till march 31 1948 and thereafter companyverted itself into a limited companypany of the same name in which also the said partners were the main shareholders.
the claim was finally rejected by the appellate tribunal on the ground that the liability was accepted by the respondent long after the previous year relevant to the assessment year 1950 51.
these amounts were claimed by the allahabad woollen mills as extra price of mill yarn supplied by them to the respondent for the accounting period from april 1 1946 to march 31 1949.
the manufacture and export of carpets.
i. t. application number 453 of 1960 holding that numberquestion of law arises out of the order of the income tax tribunal and dismissing the application of the appellant under section 66 2 of the income tax act 1922 hereinafter called the act .
46582 as a deduction in the assessment year 1954 55.
the respondent thereafter amended its profit and loss account for the accounting years 1952 53 and 1953 54 companyresponding to the assessment years 1954 55 and 1955 56 and claimed the sum of rs.
while making the assessment of the allahabad woollen mills for the assessment years 1947 48 1948 49 and 1949 50 the income tax officer held that the goods were supplied by the allahabad woollen mills to the respondent at a lower rate and profit to that extent had been diverted.
the respondent admitted the liability and after amending its profit and loss account for 1949 50 the respondent claimed a sum of rs.
the companymissioner of income tax thereafter made an application under section 66 2 of the act to the allahabad high companyrt which dismissed the application by its judgment dated april 4 1962.
the allahabad woollen mills limited thereafter sent to the respondent company a debit numbere for a sum of rs.
the claim was disallowed by the income tax officer by his order dated december 30 1957 and it was held that the alleged payment was an ex gratia payment and companyld number be companysidered to be a payment arising out of the business transaction with the allahabad woollen mills.
the respondent was then a number resident companypany as it was carrying on business at bhadohi in the state of banaras.
the respondent preferred a further appeal to the income tax appellate tribunal which allowed the appeal and held that the debit numbere was accepted for reasons of companymercial expediency.
the allahabad woollen mills supplied yarn to the respondent for three years ending march 31 1947 march 31 1948 and march 31 1949.
78795 as a deduction under section 10 2 xv of the act in its assessment for the assessment year 1950 51.
in making the assessments of the allahabad woollen mills the income tax officer therefore made an addition of rs.
32213 on march 23 1954.
ramaswami j. this appeal is brought by special leave from the judgment of the allahabad high companyrt dated april 4 1963 in misc.
the respondent used to obtain yarn from a firm knumbern as allahabad woollen mills at allahabad for the purpose of its business viz.
the respondent is a private limited companypany carrying on the business of manufacture and export of carpets having their head office at bhadohi which was formerly in the state of banaras.
