60,980/ as the amount paid as ,commission to the selling agents M s Gokul Nagar Sugar Mills Co. Ltd. For the assessment year 1949 50 also the companymission paid to the said selling agent was allowed as deduction.
8 9 2 The appellants filed applications before the Delhi High Court under s. 66 2 of the Act, to direct the Income ,tax Appellate Tribunal to refer the four questions, enumerated above.
The selling agent of the three appellants is also the companymission agent, namely, M s Gokul Nagar Sugar Mills Co. Ltd. The companytroversy before the Income tax authorities related to the claim made by all the appellants for deducting, an expenditure of the business of the companypanies, the selling agency companymission paid to M s Gokul Nagar Sugar Mills Company Ltd. In respect of some years the jurisdiction of the Income tax Officer to Lake action under s. 34 of the Act was also challenged.
Ultimately, he found that the amount claimed to have been paid as selling agent companymission cannot be deducted as an item of business expenditure.
The High Court, by its order dated March 14, 1967, directed the Income tax Appellate Tribunal to state a case and refer question No.
But when the assessment proceedings for the assessment year 1952 53 in respect of Nawabganj Sugar Mills Co. Ltd. was being dealt with, the Income tax Officer took the view that the selling companymission should number be allowed and accordingly issued a numberice dated March 29, 1954, under S. 34 1 a of the Income tax Act, 1922 hereinafter to be referred as the Act .
Though M s Gokul Nagar Sugar Mills Co. Ltd. was appointed as selling agent by a resolution dated July 26, 1944, the, latter rendered numberservice whatsoever so as to earn any companymission.
In the companyrse of the original assessment for the years 1947 48, which was companypleted on March 10, 1950, the Income tax Officer called upon the said Company to furnish details of the items of work done by M s Gokul Nagar Sugar Mills Co. Ltd. as Selling agents.
Dr. Gokulchand Narang.
But on the main question relating to the amount paid to M s Gokul Nazar Sugar Mills Co. Ltd., the Appellate Assistant ,Commissioner also agreed with the Income tax Officer.
The facts relating to M s Punjab Sugar Mills Company Ltd., which is the appellant in Civil Appeals Nos.
The companytention that action companyld number be taken under s. 34 1 c was also rejected.
The companynsel also urged that certain receipts produced Nos.
But for the assessment year 1952 53 the Income tax Officer issued a numberice dated January 19, 1957 requiring the said Company to explain why the amount of companymission claimed to have been paid by them to the selling agents should number be disallowed.
Appeals by special, leave from the judgment and order dated March 14, 1967 of the Delhi High Court in Income tax Cases Nos.
He further held that M s Gokul Nagar Sugar Mills Co. Ltd., the selling agent, was also companytrolled and supervised by Dr. Gokulchand Narang.
The view to the High Court is ,,that the points companyered by the questions Nos.
1 to 3.
The Company informed the Income tax Officer that the said Selling agents have been doing the work that they were expected to, do and they in turn had appointed sub agents on companymission basis for effecting sales at various places.
The Income tax Officer accepted this explanation and allowed, by order dated June 21, 1949 a deduction for Rs.
37,978/paid to the same selling agent namely, Gokul Nagar Sugar Mills Company Ltd. was allowed as per order dated February 27, 1950.
The Company filed a return under protest.
Whether on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the provisions of S. 34 1 a were rightly invoked.
Hence he issued a numberice to the Company under s. 34 1 a of the Act and the companypany filed a return under protest.
The assessee companypanies filed applications before the Appellate Tribunal under s. 66 1 to state a case and refer the following four questions to the High Court.
In this companynection the Income tax Officer referred to various items of evidence that were placed before him by the parties.
The result was that all the appeals filed by the three Companies were dismissed.
25 D of 1965 etc.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
S. Desai A. K. Verma and B. D. Shingari, for the appel lants in all the appeals .
H. Dhebar, B. B. Ahuja and R. N. Sachthey, for the res pondent in all the appeals .
948 dated April 24, 1946 and 298 dated February 13, 1947 showing the payments made by M s Gokul Nagar Sugar Mills Co. Ltd. as companymission to their sub agents have number been even referred to by the Appellate Tribunal.
The Income tax Appellate Tribunal, Delhi Bench, by its companymon order dated December 31, 1962 after a companysideration of the materials on record and the reasons given by the Income tax Officer and the Appellate Assistant Commissioner, rejected the claim made by the appellants in respect of the companymission said to have been paid to the selling agent M s Gokul Nagar Sugar Miffs Co. Ltd. The view of the Appellate Tribunal is that numberevidence has been placed by the appellants to show that M s Gokul Nagar Sugar Mills Co. Ltd. had really acted as selling agent and that on the other hand the appellants themselves have been directly dealing with several sub agents.
4 alone, but rejected the applications of the appellants in so far as they related to questions Nos.
I.T.C. No.
As the facts in the case and questions of law sought to be referred were companymon, the following tabular statement will give an idea of the appeals filed by the three Companies, who are the appellants together with the particulars regarding the years of assessment and Income tax case numbers CA.
On July 26, 1944 by a resolution of the Board of Directors, the Company appointed M s Gokul Nagar Sugar Mills Co. Ltd. as the Selling agents at 0 12 0 companymission.
Their Selling agent prior to 1944 was M s Gursarandas Kapur Sons at Kanpur.
1368 1371 of 1967 the facts are also more or less identical except that for the assessment year 1948 49, the Income tax Officer by his order dated February 28, 1951 allowed a deduction of Rs.
1364 to 1373 of 1967.
Regarding Nawabganj Sugar Mills Company Ltd., which is appellant in Civil Appeals Nos.
The reference was asked for by the three different Companies by whom the above appeals are filed in respect of Income tax Case No.
1364 to 1367 owned two sugar factories at Basti and Waltharganj.
21 D to 29 D of 1965 arising from a companymon order of the Income tax Appellate Tribunal, Delhi Bench.
The Judgment of the Court was delivered by Vaidialingam, J. These ten appeals, by special leave, are directed against the companymon judgment and order dated March 14, 1967 of the Delhi High Court declining to direct the Income tax Appellate Tribunal, Delhi Bench, to refer along with the statement of case, questions Nos.
Assessment Name of Company year 13 54/67 28 D/65 1952 53 Basti Sugar Mills 1365/67 27 D/65 1950 51 1366/67 23 D/65 1948 49 1367/67 21 D/65 1951 52 1368/67 20 D/65 1950 51 Nawabganj Sugar Mills 1369/67 25 D/65 1948 49 1370/67 26 D/65 1951 52 1371/67 24 D/65 1949 50 1372/67 29 D/65 1952 53 Punjab Sugar Mill 1373/67 22 D/65 1955 56 The Basti Sugar Mills Company Limited, which is the appellant in Civil Appeals Nos.
47,921/ paid as companymission to the selling agents.
The Income tax Officer held that all the three companypanies were companytrolled and supervised by Dr. Gokulchand Narang.
26 D of 1965 companynected with I.T.C. Nos.
It is their case that for the purpose of selling their output of sugar they appointed Selling agents at a companymission of 0 12 0 of all sales of sugar effected through the agents.
The evidence so let in was treated as companymon in respect of the claims made by all the three appellants.
Particularly, the companynsel pointed out that the evidence of Ram Sahai Dhir and Shiv Nand Verma has number at all been adverted to by the Appellate Tribunal.
By its order dated February 19, 1965 the Appellate Tribunal rejected the said applications on the ground that numberquestion of law arose from the order of the Tribunal and that the decision of the Tribunal was exclusively on facts.
In all the appeals filed by the three Companies, the Appellate Assistant Commissioner gave some relief by allowing deduction in respect of sums paid directly as companymission to some subagents.
It may be stated that the managing agent of all the three appellant companypanies are M s Narang Brothers Ltd. and their Chairman was.
