TMI Blog1976 (7) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... company in respect of that amount on the ground that in the circumstances of the case the amount represented a revenue trading loss arising to the assessee-company in the course of its business ? " The assessee-company consists of a group of cotton textile mills containing five units some of which are composite and some of which are not composite. For the year of account 1948, relevant to the assessment year 1949-50, the assessee-company submitted a return of income showing a net profit of Rs. 59,71,594 as per its books of account. Messrs. Agarwal Co., a partnership firm, was the managing agent of the assessee-company. The managing agency firm consisted of certain partners some of whom were individuals and the others were firms. The ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted his remand report on July 22, 1957. After the remand report was received the Appellate Assistant Commissioner heard the appeal and dismissed the same by his order dated May 16, 1969. Aggrieved by the order of the Appellate Assisstant Commissioner the assessee-company preferred an appeal to the Tribunal. The Tribunal allowed the appeal. It came to that conclusion that the proviso to section 13 was not applicable in the present case and directed deletion of the addition of Rs. 76,92,566 made by the Income-tax Officer to the income of the assessee-company. The Tribunal in its order has exhaustively dealt with the various contentions that were urged both on behalf of the assessee-company as well as on behalf of the revenue. It was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal that the contracts, at least those ones up to and inclusive of 24th April, though ostensibly at controlled rates, were at higher prices, the assessee-company collecting the difference--what is commonly known as " on money " disclosing in the books only the contracted controlled prices on the ante-dated dates. In support of this plea the revenue relied upon several factors. It was pointed out that there were several contracts where there were no dates and there were contracts where the names of the parties had been changed and in certain cases there was a change of date as well. It was also pointed out on behalf of the revenue that in certain cases the sales advices were for later contracts and they have been made earlier an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the managing agents had no regard for the welfare of the assessee-company that was managed by them ; they committed the assessee-company to the onerous responsibility of performing contracts for the supply of very large quantities of cloth at controlled rates with the object of benefiting themselves in the transactions by putting up nominees and relations of theirs to purchase the same. Upon scrutiny of all the circumstances the Tribunal came to the conclusion that as far as the assessee-company was concerned it could not be said that the alleged income either accrued or was received in fact by the assessee-company. Accordingly, it was not possible on the facts and circumstances of the case to take the view that the proviso to section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee-company and it may well be, though it is not necessary for us in this reference to decide the same, that such partners might have ante-dated the contracts at controlled prices and received much larger amounts than the prices mentioned in the contracts from the various purchasers who may be their nominees or outsiders. In such an event the amount, if any, that might have been received by the managing agency firm can never be treated as amount received by the assessee-company, because no amount whatsoever accrued to the assessee-company and in fact none has been received by the assessee-company. As stated above, on the various circumstances which were pointed out on behalf of the revenue the Tribunal came to a clear finding that the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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