TMI Blog2018 (4) TMI 1480X X X X Extracts X X X X X X X X Extracts X X X X ..... being an agent of this assessee did some unauthorized act, the appellant-assessee cannot escape the liability arising out of such unauthorized act of his agent. Mrely because payments have been received in the name of M/s Pawan Carrier the assessee cannot derive any benefit out of that and the assessee cannot be allowed to avoid the liability arising out of non- supply of Bitumen to the consignees. M/s Pawan Carrier has been held to be an agent of the assessee, the assessee would be liable for the shortfall in the quantity of Bitumen delivered by M/s Pawan Carrier. The amount received by M/s Pawan Carrier was on the basis of the authorization of the assessee as an agent of the assessee, therefore the assessing officer and the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 23.01.2015 the following substantial questions of law have been framed for the purpose of these appeals:- (i) Whether or not on the facts and in the circumstances of the case M/s Pawan Carrier being a separate taxable entity and old assessee of Ward No.18(12), Kolkata and admittedly having executed the carriage contract in question and received payment for the same through Bank can be held to be a smoke screen or front for the Appellant-Assessee? (ii) Whether the Assessing Authority under the Income Tax Act, 1961 was at all justified and acted legally in holding the Appellant-Assessee responsible, on the facts and in the circumstances of this case, for the alleged shortfall in quantity of Bitumen allegedly short delivered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly with the directions contained in the set aside the order dated 30.05.2001 and to ensure the end of justice? A perusal of the impugned order, which is a common order in both the cases, would show that the appellant happened to be an individual assessee who derived income from transportation business running in the name of M/S Bhartiya Trading Company and salary income from M/s J.G. Founding Ltd. For the assessment years 1995-96 and 1996-97 assessment was completed on total income of ₹ 49,38,985/- and ₹ 98,01,294/- respectively. The case relates to the infamous Bitumen Scam which was going on in the Road Construction Department, State of Bihar and was widely reported in the Indian media. M/s Bhartiya Trading Company w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- I hereby authorize our sister concern M/s Pawan Carrier, 40/1, Stand Road, Kolkata to execute the above order on my behalf. According to impugned order, the assessee failed to produce anyone from M/s Pawan Carrier. The Assessing Officer arrived at a conclusion that the assessee was involved in this case. The contract was not fully executed and part quantity of 1981.60 M.T. Bitumen was not delivered to various consignees and the same was misappropriated in collusion with M/s Pawan Carrier for its own benefit. The estimated cost of the Bitumen were added to the total income of the assessee. The Tribunal having gone through the materials available on record disbelieved the case of the assessee that M/s Pawan Carrier was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - assessee to execute the contract on his behalf. The assessee was called upon to produce the proprietor of said M/s Pawan Carrier but he failed to produce him and pleaded that M/s Pawan Carrier is a rival business entity and therefore does not produc e him for examination. The Tribunal has taken note of the facts appearing from the record that M/s Pawan Carrier had lifted the Bitumen while executing the contract according to direction of assessee. Law of agency in this regard is well settled. If the appellant introduced M/S Pawan Carrier as its agent and by virtue of his authorization given in favour of M/S Pawan Carrier if the oil companies allowed M/s Pawan Carrier to lift the Bitumen and then M/s Pawan Carrier being an agent of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answer the substantial questions of law as framed in the following para in its chronological order:- (i) In the facts of the present case, it is concurrent finding of all the authorities that M/s Pawan Carrier was acting on the basis of an authorization granted in their favour to execute the contract on behalf of the assessee and therefore all the act done by M/s Pawan Carrier will be binding upon the assessee and merely because payments have been received in the name of M/s Pawan Carrier the assessee cannot derive any benefit out of that and the assessee cannot be allowed to avoid the liability arising out of non- supply of Bitumen to the consignees. (ii) M/s Pawan Carrier has been held to be an agent of the assessee, the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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