TMI Blog1979 (10) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... eference, the Tribunal merely followed the appellate order annexed in T.C. No. 28 of 1976. The assessee is a registered firm carrying on the business of manufacture and sale of silk cloth at Arni. There were five partners in this firm, namely, (i) Thiagarajan, (ii) Jagadeesan, (iii) Balasundaram, (iv) Alagesan and (v) Smt. Pattammal, each having an equal share. The first four are brothers and Smt. Pattammal is their mother. There was another firm known as M/s. Somasundaram and Brothers at Arni consisting of Alagesan, one of the partners of the assessee-firm, one Manivannan and five minor sons of Jagad Thiagarajan and Balasundaram. The minors have been admitted to the benefits of the partnership. The assessee-firm had a substantial turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the bills was also a little larger in this case than in the other case. The Assistant Commissioner was of the opinion that considering the off-take by Somasundaram Brothers, even the rebate of 9% could not be described as unreasonable or excessive. He, therefore, directed the allowance of the claim made by the assessee. The Tribunal on appeal at the instance of the ITO came to the conclusion that the was charged only on the basis of the net price realised from Somasundaram Brothers and that the assumption that the entire sale proceeds were taxable subject to an allowance by way of a deduction of the discount was incorrect. It was, therefore, held that the provisions of s. 40A did not at all come into the picture in such a case. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any expenditure in respect of which payment has been or is to be made to any person referred to in cl. (b) of s. 40A(2). If there were any such expenditure and if the ITO was of opinion that such expenditure was excessive or unreasonable, then so much of the expenditure as was considered by him as excessive or unreasonable was not to be allowed as deduction. We have, therefore, to consider whether there was any expenditure in the present case. It is in this context that we have to refer to the findings of the Appellate Tribunal in its order. In para. 7 of its order, the Tribunal has stated : " What happened actually was that the assessee sold the goods to Somasundaram and Brothers at a discount. This means that so far as the sales t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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