TMI Blog1989 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... tribunal was correct in law in holding that the commission of Rs. 3,62,325 was eligible for deduction in the hands of the assessee, although the identity of the recipient could not be established ? 2. Whether, on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was correct in allowing bad debts of Rs. 17,390 for which the assessee could not furnish any details?" The assessee is a public limited company engaged in the manufacture and sale of heavy electrical equipment which it supplies to the Electricity Boards. It claimed certain deductions as commission payable to one Mr. Madan Lal Jain. It also claimed a deduction of Rs. 17,398 towards amounts written off in the account of Meenakshi Engineering Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar payments of commission were allowed by the Commissioner of Income-tax (Appeals) in the assessment years 1974-75 and 1975-76. It further observed that the rate of commission appears to be quite reasonable. The main contention of Mr. Pandey, learned counsel for the Revenue, is that the Tribunal has taken into consideration extraneous reasons, i.e., similar payments of commission for the assessment year 1975-76 and rate of commission being reasonable. He submits that a reference to the assessment year 1975-76 with regard to similar payments of commission is erroneous. We have seen the order of the Commissioner of Income-tax (Appeals) dated March 28, 1981, wherein he has stated in paragraph 9 that for the assessment year 1975-76, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on conjectures and surmises. He referred to a number of decisions most of which have been referred to in CIT v. Biju Patnaik [1986] 160 ITR 674 (SC). After noticing the various earlier decisions, the court felt that ignoring certain relevant facts was a vital matter which had influenced the decision and the conclusion had to be judged in its proper perspective. According to the court, ignoring the fact as to who made the donations and their capacity to make it was a vital fact which gave rise to the question of law. In the present case, the Tribunal has held that the identity of Mr. Madan Lal Jain has been established from the correspondence, the bank account in the Union Bank of India and the certificate issued by the Assistant Enginee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these letters were filed for the first time before the Commissioner of Income-tax (Appeals) and he noticed that they required verification and due consideration and had remanded the matter so that, inter alia, these could be verified, it would appear to us that reliance on this material without due verification raises a question of law. Consequently, we reframe question No. 2 as follows: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in permitting deduction of Rs. 17,398 on the basis of the letters dated March 24, 1976, and November 3, 1977, produced for the first time, without due verification of the said letters ?" Accordingly, we reject the reference application with regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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