1986 (11) TMI 100 - AT - Income Tax

Summary

Issues:
- Two appeals by the assessee for the same assessment year
- Setting aside of assessment by Commissioner(A)
- Disallowance of commission and bad debts

Analysis:

1. The judgment involves two appeals by the assessee for the same assessment year, 1979-80. The initial assessment completed by the ITO was challenged on grounds of lack of proper opportunity for the assessee and improper consideration of evidence. The Commissioner(A) set aside the assessment directing a fresh assessment by the ITO after a reference to the IAC under s. 144B. The assessee appealed to the Tribunal against this decision, questioning the setting aside of the assessment and the sustained additions by the IAC. The Tribunal dismissed this appeal (I.T.A. No. 827 (Del) of 1984) as the representative did not press the arguments challenging the setting aside of the assessment.

2. The second appeal (I.T.A. No. 6058 (Del) of 1985) focused on the disallowance of commission and bad debts. The commission payment to M/s Talreja & Company was disallowed without reason by the ITO and later by the Commissioner(A) due to lack of evidence for liaison work claimed. However, it was clarified that the payment related to the previous year and not the current assessment year, leading to the deletion of this disallowance. Regarding bad debts amounting to Rs. 1,03,389, the Commissioner(A) disallowed the claim citing lack of satisfactory evidence. The Tribunal directed the Commissioner(A) to re-examine these points, allowing the assessee to produce evidence, and giving the ITO an opportunity to review the evidence presented.

3. The Tribunal dismissed the first appeal while allowing the second appeal for statistical purposes. The judgment emphasized the importance of providing opportunities for evidence presentation to ensure justice and proper implementation of the law, especially in cases involving disallowances based on lack of proof. The decision aimed to uphold fairness and prevent undue taxation on items not constituting the assessee's income.