1987 (8) TMI 16 - HC - Income Tax

Summary

Issues:
1. Consideration of nine questions of law by Commissioner of Income-tax.
2. Rejection of questions covered by earlier court decision.
3. Examination of questions 6 and 9 regarding interest claim and deduction of payments to field organizers.
4. Tribunal's direction to state a case for decision on the mentioned questions.
5. Arguments presented by counsels for the assessee and the Department.
6. Tribunal's findings on the nature of services rendered by market supervisors.
7. Decision to refer questions for the court's decision.

Analysis:

The judgment pertains to an application by the Commissioner of Income-tax seeking reference of nine questions of law. However, several questions were found to be covered by a previous court decision, leading to their rejection. Consequently, only questions 6 and 9 remained for consideration. Question 6 involves the Tribunal's justification in deleting an addition of Rs. 3,67,619 from the interest claim. The counsel for the assessee argued that the interest calculation was related to advances made to different parties, with only one party being discussed in the earlier order. Despite the contention that other advances were for business purposes, the court directed the Tribunal to refer the question for decision, highlighting the lack of separate discussion by the Tribunal on the advances made to different parties.

Regarding question 9, it concerns the deduction of Rs. 1,48,500 for payments made to field organizers post the abolition of the sole selling agency. The counsel for the assessee contended that the market supervisors had provided services and were entitled to remuneration. However, the Tribunal's observation suggested that the list of services provided was more cosmetic than actual, indicating a lack of services rendered. As the correspondence supporting the services was not available on record, the court deemed it necessary to refer the question for clarification. The Tribunal was directed to state the case for both questions for the court's decision, allowing for further examination and clarification on the issues raised.

The judgment concludes by disposing of the application with no order as to costs, emphasizing the need for a detailed examination of the questions at hand to ensure a comprehensive decision based on the facts and circumstances presented.