1994 (5) TMI 22 - HC - Income Tax

Summary

Issues:
- Application under section 256(1) of the Income Tax Act, 1961 seeking a direction to the Income-tax Appellate Tribunal to state a case and refer a question of law.
- Disallowance of claimed commission payable to an individual by the Income-tax Officer.
- Appeal to Commissioner of Income-tax (Appeals) upholding the disallowance partially.
- Further appeal to the Tribunal resulting in the allowance of the claimed commission.
- Dismissal of Revenue's application under section 256(1) by the Tribunal.
- Contention by Revenue regarding incorrect findings of the Tribunal.

Analysis:
The judgment pertains to an application under section 256(1) of the Income Tax Act, 1961, where the Revenue sought a direction to the Income-tax Appellate Tribunal to refer a question of law arising from an appeal regarding the disallowance of claimed commission payable to an individual. The Income-tax Officer disallowed the claimed commission as the liability was deemed indeterminate, leading to its addition to the income of the assessee. The Commissioner of Income-tax (Appeals) partially upheld the disallowance but restricted it to the amount debited in the books of account. Upon further appeal, the Tribunal allowed the claimed commission, emphasizing the existence of an agency agreement and the undisputed nature of the liability. The Tribunal's decision was based on factual findings, leading to the dismissal of the Revenue's application by the Tribunal.

The Revenue contended that the findings of the Tribunal regarding the remaining due amount, the acknowledgment of liability in the suit, and the undisputed nature of the liability were incorrect. However, the court held that since the Revenue failed to raise specific questions about these findings in its application, it could not challenge them later. Therefore, the court found no fault with the Tribunal's decision to decline the reference to the court. Ultimately, the court dismissed the application, ruling in favor of the assessee and stating that there was no merit in the Revenue's contentions.