TMI Blog1984 (12) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... decision or order of the Appellate Board. This is a matter in which an appeal ought to have been filed. I am, however, unable to uphold the preliminary objection upon this ground because the petition has been entertained and heard and there is some doubt as to whether the appeal would now be entertained ; Hirday Narain v. ITO [1970] 78 ITR 26, 31 (SC). The first petitioners carry on business as indenting agents of foreign manufacturers of drugs and chemicals. They place orders with foreign manufacturers for the supply of drugs and chemicals to Indian purchasers. The first petitioners are paid commission by the foreign manufacturers. The rate of commission varies and differs from foreign manufacturer to foreign manufacturer. After the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76, the petitioners filed a reply setting out their case as aforesaid. On November 30, 1976, the Additional Director of Enforcement found the petitioners guilty of the charges and imposed upon the first petitioner a penalty in the aggregate sum of Rs. 51,500 and a penalty of Rs, 4,200 on each of the partners. The petitioners preferred an appeal to the Appellate Board on January 17, 1977. On November 29, 1980, the penalty levied upon the petitioners was confirmed by the impugned order. The challenge in the petition has been limited by Mr. Hidayatullah, learned counsel for the petitioners, to the penalty of Rs. 50,000 upon the first petitioner and of Rs. 4,000 upon the second petitioner in respect of the charge under section 9. Put shortl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dominion and control over the commission amounts credited in the petitioners' accounts with the foreign manufacturers. As such, the petitioners could be said to have owned and held the amounts of commission credited in their accounts from the dates of the credit notes or, at the latest, from the dates upon which the petitioners received the credit notes. The Appellate Board went on to observe that the credit notes proved that the petitioners had the right to receive the commission amounts mentioned therein and, as there was an inordinate delay on the part of the petitioners in receiving the commission amounts, it was possible that the petitioners had committed contravention of section 10(1). The interpretation of the phrase " owns or hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notes, the petitioners were only made aware that the issuers thereof had placed in their books of account the amounts mentioned in the credit notes to the credit of the petitioners. The petitioners had no more than the right to receive the moneys in foreign currencies stated in the credit notes. In my view, therefore, section 9 had no application to the case and the Appellate Board's order in so far as it upholds the charge under section 9, the penalty of Rs. 50,000 imposed upon the first petitioners and of Rs. 4,000 imposed upon the second petitioner cannot stand. It is not now necessary to go into the alternate argument advanced by Mr. Hidayatullah that the amounts mentioned in the credit notes were contingent debts because the foreig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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