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TMI Blog2007 (12) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... one Pvt. Ltd. ? 2. Whether the finding that the appellant could not give specific evidence regarding nature of services rendered by the said company is without evidence and contrary to the evidence on records, are per verse and have vitiated the conclusion ?" 3.The precise controversy relates to the disallowance of the commission paid by the assessee to M/s. Laxmi Stone Pvt. Ltd., in the three relevant assessment years. The claim of the assessee had been, that when the company was formed, an Indian machine was installed which was previously imported, and there was an understanding between the firm, and the shareholders, that in case the machine is successful, more plants will be sold, and the firm will give commission, and they will promo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant- firm at the time of survey, has been apparently made in a suspicious manner and not during the normal course of business. (4) M/s. Laxmi Stone (P.) Ltd. is a connected family concern. It has filed loss returns for various assessment years including the assessment year under consideration. It is clear that the appellant-firm has diverted part of its profit in the form of bogus commission to be adjusted against the losses declared by M/s. Laxmi Stone (P.) Ltd." 6 After so cataloguing the circumstances, simply held, that these facts I have not been disputed by learned counsel for the assessee, and thus it was found, that the payment of commission was not genuine, rather there has been clear attempt by the assessee to someho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant before the lower authorities, and purporting to have regard to the entire facts and circumstances of the case, proceeded to confirm the action of the Assessing Officer, and that of the Commissioner of Income-tax. .8.It is significant to note, that in this paragraph 25 itself, it was further held by the learned Tribunal, that there was no need for any written agreement for the payment of commission, for the services rendered. 9.Assailing the impugned order, learned counsel for the assessee submitted, that when it was admitted position, that the assessee and the company are not sister concerns, and when it has been found that no written agreement was necessary for making payment of the commission, for the services rendered, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be diverted to the company, and has rightly been disallowed by the learned authorities below. It was also contended that the I assessee has failed to produce any material to show that any services were rendered by the company, which entitled the company to receive the com mission. May be, that the written agreement may not be necessary, but then, the evidence was required to be led by the assessee, and despite I opportunities being given by the Assessing Officer, the assessee did not lead any evidence, and, therefore, the Tribunal was right in upholding the disallowance of the amount. 11.We have considered the submissions. At the out set we may observe that in J. K. Woollen Manufacturers v. CIT reported in [1969] 72 ITR 612, hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any before the authorities below is concerned, true it is that the assessee did not lead any evidence before the authorities below, as contemplated by the learned Tribunal, but then, at least he had led his own evidence, by deposing to the effect, that at the time when the company was formed, an Indian machine was installed which were previously imported, and there was an understanding between the firm, and the shareholders, that in case the machine is successful, more plants will be sold, and the firm will give commission, and they will promote their sales, This is very clear and categoric evidence of the assessee, about the nature of services rendered, terms of the agreement, and the eventualities in which the incident of commission would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises of the company, and on the advise, and with the cooperation of Parvinder Singh, who is the key person in the company; apart from the fact that this Parvinder Singh himself has also corroborated it by filing his own affidavit. 14.Thus, the finding recorded by the learned Tribunal is vitiated on account of non-reading of the material available on record as well. 15.Thus, in our view, it cannot be said that the learned Tribunal or the authorities below were correct in disallowing the amount of commission paid by the assessee during the relevant assessment years and that the finding recorded by the learned Tribunal is contrary to the specific evidence led by the assessee regarding the nature of service rendered by the company also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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