TMI Blog2002 (10) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 263 of the Act. One other appeal preferred by the assessee is against the imposition of penalty for wrong estimate of advance tax and this is with reference to the same issue as is contained in the quantum appeals. These appeals are grouped for the aforesaid reasons and are disposed by this combined order. 2. The background facts of assessee is quite interesting and it is brought out hereunder. The assessee was the employee of an American company M/s. Chasebrough-Pond's Inc. till it was allowed to carry on its business in India. Because of the ruling of the Government allowing foreign company's to carryon business in India only by being a shareholder to the extent of 49% in the Indian company, Ponds (India) Ltd. was formed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of any services rendered or in discharge of any legal obligation by the said corporation to me. The amount was paid to me, as would be evident from the correspondence, which was already within the knowledge of the Department, in consideration of the personal esteem and goodwill that they bore to me....I invite your kind attention to the copies of the enclosed letters and statements, where specific reference has been made to this receipt...I have specifically mentioned about the receipt of the aforesaid sum, while submitting the return of income, the copies of correspondence were again enclosed for easy reference, so that at the time of assessment, the fact was well within the knowledge of the Deputy Commissioner. Hence, the assessment fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion working for the representative office in India. I was nominated by Messrs. Chasebrough-Pond's Inc. as one of their Nominee Directors on the Board of Messrs. Ponds (India) Limited. This position I held since I was already the Managing Director and Chairman. No remuneration was either allowed or paid for being the nominee of Chasebrough-Pond's Inc. on the board of Messrs. Ponds (India) Limited. My remuneration was by Ponds (India) Limited for whom I was rendering services. Thus there was no quid pro quo for the receipt of US $ 1,00,000 or any other sum at all from Messrs. Chasebrough-Pond's Inc. and this amount did not constitute either remuneration or consideration for the services rendered. 3.3 Messrs. Chasebrough-Pond's Inc. has spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revised estimate is on account of interest income of Rs. 10,900 on the deposit of US $ 1,00,000 with Grindlays Bank, 164, Mount Road, Chennai - 600002 made on 23rd January, 1987. The aforesaid deposit of US $ 1,00,000 represents amount received by me from Messrs. Chasebrough-Pond's Inc. Connecticut, USA, at the time of their merger through acquisition by Unilever Company. This amount has been sent to as honorary head of their representative office in India over a span of years and as a token of their goodwill and esteem". 3.5 The assessment was completed under section 143(1) of the Act. CIT considering that the assessment was framed without scrutiny of the facts that the assessee was the former employee of Chasebrough-Pond's Inc. and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of CIT in selling aside the assessment to be redone after giving the assessee a reasonable opportunity of hearing. 5. Considering the issue on merits of the case, the facts as are on record show that the US $ 1,00,000 and the Benz car was given to the assessee for representing the Chasebrough-Pond's Inc. in India. The assessee accepts that he was the honorary representative of the US Company in India and that there was no employee of the representative office and that the car was imported for the use of the representative in India. The assessee also accepts that soon after the waiting period of transfer of imported car was over, it was transferred to him. It was for past services to the said company and paid at the time of merger wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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