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TMI Blog2010 (12) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... for AY 1987-88 88-89 pertain to receipt of commission from M/s Bofors, a Swedish company, dealing in arms and ammunition, to the extent not disclosed by the assessee and in subsequent years, income from interest on this undisclosed commission. In all these years there are other additions on account of House Property income and disallowance of business expenses. The figures are given in the respective assessment orders. They can be summarized as under: A: Common ground for AYs 1987-88 and 1988-89 - Addition on account of commission: 1. That the CIT (A) erred on facts and in law in confirming the additions at Rs. 52,60,34,469/- and 85,31,425/- respectively made by the Assessing Officer on account of alleged commission received by the appellant through M/s. Svenska Incorporated Panama, alleged to be a front company of the appellant. 1.1. That the CIT (A) erred on facts and in law in not appreciating that the aforesaid addition was made by the assessing officer without bringing on record any evidence to substantiate the allegation that the appellant had received any commission from AB Bofors. 1.2.That the CIT (A) erred on facts and in law in relying upon SNAB and the letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. H W Chadha and Mrs. K. W. Chadha, holding that the premises in respect of which the rent was paid, was being used for non-business purposes. iv) That the CIT (A) erred on facts and in law in sustaining the disallowance of motor car running expenses at 1/6th of the expenditure by holding that element of personal user could not be ruled out. v) That the CIT (A) erred on facts and in law in confirming the disallowance of expenditure of Rs.53,691 incurred by the appellant towards presents to delegates of foreign principals under section 37(2A) of the Act, holding the same to be entertainment expenditure. vi) That the CIT(A) erred on facts and in law in upholding the action of the assessing officer in disallowing short term capital loss of Rs.67,062 on sale of shares, by holding that the transaction of the sale of shares made to the wife of appellant was a sham transaction. E: Levy of Interest u/s 234 2. The brief facts of the case are - 2.1 In 1987, a scam in purchase of defense equipments, known as the Bofors Scam was unearthed, indicating that in respect of the gun deal between M/s. Bofors, a Swedish company dealing in arms and ammunition and the Govt. of India illeg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agents in India. 2.5. M/s. Bofors of Sweden also, in its declaration dated May 19, 1984, under the signature of Hans Ekblom, Vice President (Marketing), had informed that - W.N. Chadha of M/s. Anatronic General Corporation, C-4, Main Market, Vasant Vihar, New Delhi 110057, was their agent, and that, apart from W.N. Chadha, Hersh W. Chadha, Marketing Director of M/s. Anatronic General Corporation, Brig. B.B. Bhatnagar (retired) and Brig. A.L. Verma (retired) were designated: (a) to liaise with the Government of India for the contract; (b) to liaise with the Indian Authorities. 2.6 Consequent to the changed defense purchase policy, the Defense Department, asked M/s. Bofors on May 3, 1985, to dispense with the services of its declared agent and comply with such Indian Defense policy requirements. Bofors did not respond immediately and as late as on March 10, 1986 informed the Defense Secretary that, Bofors "do not have any Representative/Agent especially employed in India for this project". However, for administrative services, such as hotel bookings, transportation, forwarding of letters, telexes, etc., they were using a local firm, Anatronic General Corporation, C-4, Main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sensitive issues of Indian Defense Policies, corruption, manipulations etc. The Govt. of India acted on these disturbing events, and on 21-4-1987, made a formal request to the Government of Sweden for an investigation into the allegations. 2.12. The Swedish Government accepted the request of the Govt. of India and ordered an enquiry by its organization, the Swedish National Audit Bureau (SNAB). The SNAB submitted its report to the Swedish Government on June 01, 1987, which was forwarded on June 04, 1987 to the Govt. of India. SNAB report, inter alia, made the following disclosures: "that an agreement exists between AB Bofors and --------- (omitted) concerning the settlement of commission subsequently to the FH-77 deal, and; that considerable amounts have been paid subsequently to, among others, AB Bofors' previous agent in India". 2.13. SNAB thus confirmed that these payments to the tune of SEK 170- 250 million were indeed made by Bofors in connection with this Defense contract to its previous agent in India, but the names of the recipients were not mentioned. 2.14. Facts thus emerged from SNAB report that despite having full knowledge about the policy of the Govt. of India t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sector of oil refineries, gas processing, petrochemicals, fertilizers and pipelines. Neither Snamprogetti, nor Mr. Quattrocchi had any experience of guns, gun-systems or any related defense equipments. 2.18. It emerged that after payment of SEK 1,682,132,196.80 (Rs.29615.00 lakhs), equivalent to 20% of the contract value, to Bofors on May 2, 1986 by the Govt. of India, Bofors remitted a sum of SEK 50,463,966.00 (equivalent to US $ 7,343,941.98), on September 03, 1986, to A/c No. 18051-53 of M/s. A.E. Services Limited at Nordfinanz Bank, Zurich. This Account of M/s. A.E. Services Limited C/o Mayo Associates SA, Geneva, had been opened only a fortnight earlier, on August 20, 1986, by Myles Tweedale Stott as its Director. This amount of SEK. 50,463,966.00 works out to be exactly 3% of the amount of advance paid by the Govt. of India to Bofors and was, thus, perfectly in accordance with the terms set out in the A.E. Services Ltd. - Bofors Agreement dated November 15, 1985. 2.19. From this Account of M/s. A.E. Services, an amount totaling US $ 7,123,900 was transferred ($ 7,000,000 on September 16, 1986, and $ 123900 on September 29, 1986) to Account No.254.561.60W of M/s. Colbar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal ex-works value was to be paid without delay when the advance payment had been received by Bofors. The remaining 0.96% (point nine six per cent) of the ex-works value was to be paid pro rata without delay when the payments for deliveries had been received by Bofors. 2.23. Letters Rogatory were issued by the Court of Special Judge, Delhi to Switzerland, Sweden, Panama, Luxembourg, Bahamas, Jordan Liechtenstein and Austria, with a view to finding out other beneficiaries of the commission amounts. 2.24. The documents received from the Swiss Authorities, in response to the letter by Rogatory, revealed that the following payments were made by Bofors to Svenska from their Account with Skandinaviska Enskilda Banken, Stockholm, on May 6, 1986. SEK 113039283.64 equivalent to US$ 16,070,412.80 SEK 28259820.64 FFR 27,957,875.84 SEK 28259820.92 CHF 7,346,128.29 SEK 18839879.98 XEU 2,720,363.87 Total SEK 188,398,805.18 A calculation will show that this is almost 2.24% of the total value of the contract i.e., SEK 8410660984, exactly as per the terms of the aforesaid Agreement. 2.25. The following additional payments made by Bofors revealed that each additional payment works out to be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venska, in contravention of the policy of the Govt. of India not to allow middlemen/agents in the deal. No commission was to be paid by Bofors in connection with the contract. If any such stipulation in this regard did exist, the commission amount should have been reduced from the contract price. Thus the Govt. of India had to pay excess amount of about SEK 242.62 million, which was passed on by Bofors to its agents Mr. W.N. Chadha and Mr. Quattrocchi against the express terms of contract. 2.29. It shall be pertinent to mention relevant dates in form of a chart to further corelate the events and history: S.N o. Date Particulars 1. 1975 Expert committee set up under Chairmanship of Lt. General K.V. Krishnarao which recommended induction of medium gun of 155mm caliber - -pg 157 of PB dated 12-04-2010. 2. October 1978 Mr. W.N. Chadha entered with AB Bofors for representation in India for a period of three years ending in September 1981 which provided commission @ 2% 3. March 1981 The Representation Agreement between AB Bofors and Mr. WN Chadha extended for another period of three years. This was followed by another agreement with M/s Anatronic General Corporation for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved and MOU signed with the Government of Sweden-pg. 159. 21. 17.04.198 7 Leading newspapers in India gave coverage to Swedish Radio Broadcast that bribes had been paid to senior Indian politicians and key Defence figures in connection with the Bofors gun deal. Pg. 140. 22. 04.06.198 7 SNAB report submitted to Ministry of External Afairs - pg. 143. 23. 29.07.198 7 Union Minister of Defence, Mr. KC Pant, moved motion in Lok Sabha for appointment of a Joint Parliamentary Committee. Pg. 144. 24. 12.08.198 7 Rajya Sabha also approved formation of JPC-pg. 148. 25. 28.08.198 7 JPC set up - pg. 148. 26. 28.08.198 7 JPC submitted its report giving a clean chit to Shri WN Chadha - paper book dated 12.04.2010. 2.30. In the wake of these revelations, documents and evidences, the Income Tax Department commenced assessment proceeding in the assessee's case for different assessment years. It is pertinent to mention here that the assessment proceedings for AYs 1987-88 and 88-89 have been set aside by the CIT(A) on four occasions on the ground that investigations were in progress and material available on record was not sufficient to uphold the additions in respect of this commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten by Mr. Rehmberg cannot lead to a conclusion that Svenska was a front company of the assessee. The submissions filed by the assessee have been considered but it is not possible to accept the same due to discussion made in the subsequent paragraphs of this order. 5(iii) It is seen that since 1978, Sh. W.N. Chadha, Proprietor of M/s Anatronic General Corporation, New Delhi has been sole representative of M/s AB Bofors in India. The arrangement between Shri Chadha and M/s Bofors was extended from time to time through various agreements including the agreements signed in 1978, 1981, 1984 and 1986. In March, 1986, the Government of India placed an order with M/s AB Bofors for supply of a specified number of 150 MM Field Howitzer 778 guns and spares. In November, 1984, i.e. during the process of selection and finalisation of the guns to be purchased, the Government of India informed the public at large and vendors dealing with defence equipments supplies to India, in particulars, that there shall be no agent or middleman in all deals with Government of India. 5(iv) However, the National Audit Bureau of Sweden (hence forth referred to as SNAB report) in its report dated 1.6.87 reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent the same six companies as in the agreement with Anatronic. d) Allowed to represent the same six companies as in 1981 agreement. e) Commission 5% on ex-works value of the order. e) commission 0.25% and 1 lac SEK P.A. for expenses. f) Valid upto 30.9.1987 from the date of signature. 1986 Agreement Svenska Anatronic a) signed by Bofors on 2.1.86 a) Signed by Bofors on 3.1.1986 b) Signed by Svenska on 13.1.86 b) Signed by W.N. Chadha on 13.1.86 c) Consultant and adviser for promotion of sales in India either directly or through administrative consultant in India. c) Administrative consultant for administrative services in India. Not permitted without Bofors written consent to undertake sales activity. d) Allowed to represent. i) Satt. Electronik ii) White-head Fides of Italy. iii) Kollmorgen Corp. of USA iv) Teledyne Mec. Of USA v) SAFT SOGFA France d) i) Satt. Electronik ii) White-head Fides of Italy. iii) Kollmorgen Corp. of USA iv) Teledyne Mec. Of USA v) SAFT SOGFA France e) Commission 3.2% by letter dated e) Monthly payment of 1.00 Lac 5.5.87 from Svenska Split into 2.24% as termination charges 0.96% for consultancy during the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bofors billion business, not only considering your well earned fee but also proving that Anatronic Corp. can do business which some people - not of course - doubted some years ago. I hope that Mr. Hallanbars will hear about your achievement however his health is not good and he is not showing himself . ." 5(viii) The facts mentioned above strongly indicate that Sh. W.N. Chadha was actually involved in the Bofors gun deal. However, when the Govt. of India made its intentions known to the vendors that no middleman should be involved, M/s Bofors and Sh. W.N. Chadha made some re-arrangements and introduced another company namely M/s Svenska Inc. under the changed agreements while Anatronic General Corp. was allegedly retained to only provide support services in India to M/s Bofors and bulk of commission due to Sh. W.. Chadha was given through M/s Svenska Inc. As mentioned above Sh. W.N. Chadha finally received commission of 6% due to him; partly in the accounts of M/s Anatronic General Corp. New Delhi and balance in the accounts of Svenska Inc. 5(ix) There is also positive evidence to show that some of agreements between M/s Bofors and M/s Anatronic General Corp. and M/s Svenska ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Swiss Courts have also agreed about the commission of this crime. 5(xii) The discussion made in the above paragraph leads to the conclusion that there is sufficient material to show that Sh. W.N. Chadha was recipient of commission amounting to Rs. 52,60,34,469/- through its front company namely M/s Svenska Inc., Panama. Since Sh. Chadha has not disclosed the aforesaid commission income, the same is added to his income in this assessment order." 2.32 In first appeal, the CIT(A), after considering the assessee's arguments and the material available on record, confirmed the AO's action making the following observations: I have considered the facts of the case, I find that the report of the Swedish National Audit Bureau (SNAB) and letter written by Sh. Sven Rabinbergfan dated 07.07.86 lead to the conclusion that commission income to the extent of Rs. 52,60,34,469/- has been received by Sh. W.N. Chadha, partly in the account of M/s Anatronic General Corp., New Delhi and balance in the account of M/s Svenska Inc.Panama. The SNAB, vide report dated 01-06-87 revealed that commission payments were made to those who "took care' of the Bofors FH77-B deal with the Indian Government. The SNAB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the report spells out that Bofors did not cooperate and evidence relating to recipient of the amount was not forthcoming." The above observations of the Hon'ble Supreme Court effectively counter the contention of the assessee that the additions are based only on newspaper reports and the Joint Parliamentary Committee report ahs given the assessee a clean chit. Further the Assessing Officer has pointed out that the Swiss Courts have also agreed about the commission of this crime. From the foregoing, it is clear that there is enough evidence to lead to the conclusion that the appellant Sh. W.N. Chadha, was recipient of Rs. 52,60,34,469/- as commission, through its front company namely M/s Svenska Inc.Panama. Report of the SNAB dated 01-06-87, letter dated 07-07-86 written by Sh. Sven Rabmergan to Sh. W.N. Chadha, observations of the Supreme Court in which the report of the JPC has been incorporated all to lead to the conclusion that Sh. W.N. Chadha was the recipient of Rs. 52,60,34,469/- as commission @ 6% through its front company M/s Svenska Inc., Panama and M/s Anatronic General Corporation, New Delhi. It is clear that Sh. W.N. Chadha was actually involved in the Bofors gun deal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditions have been made on the basis of adverse inferences drawn from following reports or information: (i) Report of national audit bureau of Sweden (SNAB report) SNAB report is only a press report and has not been confronted to the appellant. The addition has been made on the basis of newspaper reports and they do not have any evidentiary value. - Quamarul Islam v. S.K. Kanta, AIR 1994 SC 1733 - Laxmi Raj Shetty v. State of T.N., (1988) 3 SCC 319. (ii) Letter written by Sh. Sven Rhambergan, an alleged associate of the appellant. The letter of Mr. Sven Ramberg on Pg. 56 does not show that any payment was made to Mr. Chadha for the contract between M/s Bofors and the GOI. In any case, the letter written by Sh. Sven Rabmbergan, an alleged associate of the appellant, cannot be viewed as conclusive evidence that the appellant had received moneys. The truth of the contents of a document is not proved by mere contents of the document an independent evidence for the purpose of substantiation is required. The letter may only be used as corroborative evidence. (iii) Report submitted by JPC giving clean chit to assessee and holding that assessee was not the middleman and no commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of evidence produced before it, and after giving a copy of all the evidences and statements recorded to the accused, may proceed to frame charges under section 211 of CrPC. c. The charges, so framed, under section 211 of the CrPC are required to be proved in the trial, which may eventually lead to acquittal or conviction, as the case maybe, under section 232 or 235 of the CrPC. d. The charge sheet is, therefore, only a report by the Police on the investigation conducted in the matter and does not, on its own, constitute any evidence. In fact, the contents of the charge sheet are not even required to be proved. It is only the charges which are framed by the Magistrate under section 211 of the CrPC which are required to be proved. e. The charge sheet is only an opinion of the investigating officer about the commission of an offence or otherwise. f. Reliance in this regard is placed on the attached cases: SATYA NARAIN MUSADI V. STATE OF BIHAR AIR 1980 SC 506 K VEERASWAMI V. UOI (1991) 3 SCC 655 vi) Photo copies of Hindu News Paper. Photocopies of documents procured from Hindu can not be relied on by Income Tax Authorities as: 1) The agreements produced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has been brought on record that the assessee actually received extra payments. Reliance is placed on following case laws: (i) CBI v. V. C. Shukla Ors, AIR 1998 SC 1406 "The rationale behind admissibility of parties' books of account as evidence is that the regularity of habit, the difficulty of falsification and the fair certainty of ultimate detection give them in a sufficient degree of trustworthiness. Since, however, an element of self interest and partisanship of the entrant to make a person - behind whose back and without whose knowledge the entry is made - liable cannot be ruled out the additional safeguard of insistence upon other independent evidence to fasten him with such liability, has been provided for in section 44 by incorporating the words 'such statements shall not alone be sufficient to charge any person with liability'." (para 34) (ii) Kishinchand Chellaram v. CIT, (1980) 125 ITR 713 (SC), at 723 "The burden was on the revenue to show that the amount of Rs. 107,350 said to have been remitted from Madras to Bombay belonged to the assessee and it was not enough for the revenue to show that the amount was remitted by Trilokchand, an employee of the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... National Bank Limited to the Income Tax Officer. Now it is difficult to see how this letter could at all be relied upon by the Tribunal as a material piece of evidence supportive of its finding." 3.6. It has been urged that all the papers in behalf of Bofors - Svenska transactions like agreements, payment invoices, transfer of money, meeting of board of directors and resulting power of attorney, copy of Svenska bank a/c which have been conclusively relied on by the lower Authorities, are merely photocopies obtained from "The Hindu" newspaper. There is neither authentication of source, contents or allegations from either the editor of, or any other responsible person from the Hindu, to ratify them and allow the assessee a chance of cross examination. This evidence cannot be relied on, as: 1) The news agency has not been produced with the originals or certified copies of the documents to testify them to be true and correct copies. 2) Page 152 of the paper-book filed by the Revenue - Termination agreement between Bofors and Svenska Inc. clearly suggests that the winding up costs were paid due to the restriction put up by the GOI and they do not amount to commission. 3.7. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional interest income cannot be added in the assessee's hands, merely on hypothetical observations. The addition is unjustified in all the years. 3.12. In respect of additions to income from house property, the Assessing Officer computed the income under the head "Income from house property" at Rs. 3,89,000 as against income of Rs. 26,000 declared by the assessee, after adding notional interest @ 15% on interest free security deposit received by M/s Hertz Agencies Pvt. Ltd.(HAPL), tenant of the assesse and substituting rent of Rs. 2600 by Rs. 2900 as received by HAPL. The AO made the additions by making the following observations: "3(i) Income from house property located at E-1, Placimo, Bombay: The previous year of income from house property is 1.7.85 to 30.6.86. Against the returned rental income of Rs. 26,000/- income from house property was calculated at Rs. 3,89,000/- in the earlier orders which was arrived at after taking into consideration the yield factor of the interest free security deposit amounting to Rs. 24,00,000/- at 18% p.a. and annual value was determined by invoking the deeming provisions of Section 23(i) of the I.T. Act." 3.13. The above addition has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition on account of notional interest." 3.15. Further, reference is also made to the following decisions in this regard: CIT vs Satya Co. Ltd. 75 Taxman 193( Cal HC) Super leasing V ACIT 56 TTJ(Bom) 258 CIT V J.K. Investors(Bombay) Ltd. 248 ITR 723 Commissioner Of Wealth Tax Vs. Akshya Textiles Trading Agencies (P) Ltd:. 2008 214 CTR (Bom) 468 3.16. Apropos disallowance of business expenditure, the ld. Counsel contends that they are in the nature of business expenditure, many of them have been allowed by the Department and the ITAT in earlier years and as such, they should be allowed. REVENUE'S CONTENTIONS: 4. The Ld Special Counsel for the Revenue Shri, G. C. Shrivastava, Advocate, on the other hand, vehemently contends that the contentions being put forth are not tenable. The proceedings under income tax and those under the criminal law are fundamentally different in nature. 4.1 The Bofors commission episode is a very complex investigation, it involved various national and international Agencies and extensive efforts to collect and collate the information. Discovery of evidence faced various road -blocks and even a single clue was so vital that it could have chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of Bofors - one with Anatronic and the other with Svenska and the letter of Mr. Ramberg. In the second assessment made in the year 1992, the SNAB report was added. In the third assessment, the details of FIR filed by the CBI and the observations of Hon'ble High Court were also relied upon. It is for the first time that vital facts like the existence of a bank account in which the money paid to Svenska was credited and the fact that such account in the Swiss bank was operated and managed by the assessee under a Power of Attorney, came to light. 2 There is no evidentiary value of the charge sheet. The charges have to be proved. The charge sheet is only a report on the investigation conducted in the matter and does not constitute an evidence. At best, it is an opinion of the Investigating officer. Revenue has not placed reliance on the opinion of the Investigating officer given in the charge sheet or on the inferences drawn regarding the commission of any offence stipulated in the charge sheet. It is also not the case of Revenue that the assessee should be charged to tax merely because the charge sheet holds him guilty of certain offences. The reliance of the Revenue is mainl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfronted to the assessee. SNAB report is not a press report. It forms a part of the Report of the Parliamentary Committee (JPC), the Report on which heavy reliance was placed by the assessee during the course of arguments. 5 Letter of Mr. Ramberg does not show that any payment was made to Mr. Chadha and further that the letter is not conclusive. The contents of the letter clearly indicate that a substantial amount was paid to the assessee in the Bofors gun deal. The letter may not be conclusive by itself, but when seen in the backdrop of other circumstantial evidence, it assumes great importance and does corroborate the fact of the receipt of commission. 6 The assessee does not have any knowledge about the existence of a company in the name of M/s Svenska and the assessee cannot be described as a middleman. The assessee cannot deny the knowledge about the existence of the company in the name of Svenska for the reason that Svenska, by their Board resolution dt. 30.04.1980, authorized the assessee to open any bank Account anywhere in the world in the name of the company and to operate such account the way he wanted. The question whether there was any middleman in the gun deal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Sumati Dayal" and "Durga Prasad More" (forming part of the Revenue's Paper Book and referred to in the course of arguments). 4.5 It is contended by the ld DR that the JPC has worked under a different frame work and separate terms of reference. There is no clean chit given to the assessee, as on various occasions, the JPC has categorically mentioned that proper information has not been submitted. During the deposition of the Bofors' representative, on various occasions, the Officer replied that the crucial information was not available at Delhi and would be supplied from Sweden. However there is no mention that any such information was ever furnished. The JPC had to submit its Report to both the House of Parliament within a reasonable time. Therefore, based on the material laid before the Hon'ble Committee findings were given. The JPC report cannot be held to be giving the assessee a clean chit for unconcluded Income Tax, Criminal, FERA and other similar proceedings. Had it been otherwise, the Hon'ble Supreme Court would not have dismissed the assessee's petition to quash the FIR. Consequently, there is no merit in the plea that the JPC Report gives the assessee a clean chit fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncan be proved only if the Minutes of the meeting held on 30.04.1980 are produced. However, not even a photocopy of such Min utes of the meeting, much less the originals have ever been produced. 8) The Telex message only states that the evidence that Mr. Katre, Director CBI had handed over to the Chief Prosecutor is the same as that the Swedish authorities have in their possession. It does not state if the Chief Prosecutor himself has the originals so as to certify that the Agreements are true copies of the originals. 5.1. In respect of the alleged summary of discussion between the Govt. of India and Bofors, 1) Bofors has categorically denied payment of any bribe and has also confirmed that negotiations had been conducted directly with the Govt. of India. Bofors has also stated that the SNAB Report was based on partial information and, therefore, carried incorrect impressions. 2) Bofors has also confirmed that in order to fulfill the conditions laid down by the Govt. of India it had had to terminate its Agreements with the Consultants in India and pay them for the settlement and that all agreements with the Consultants were terminated by January 1986. 3) Bofors confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduct and preponderance of probabilities. 6.2. The proceedings for assessment before the Assessing Officer have been described as quasi-judicial in character by Hon'ble Supreme court in Indian Eastern Newspaper Society v. CIT (1979) 119 ITR 996(SC). i) In the case of Dhakeshwari Cotton Mills Ltd. Vs. CIT (1954) 26 ITR 775(SC), the Supreme Court has observed that assessment proceedings are purely administrative. After the receipt of the return also the Assessing Officer is entitled to make private enquiries to find out as to whether there is reason to suspect that the return is incorrect or incomplete. No objection can be taken to such enquiries made behind the back of the assessee at that stage, as they are all administrative inquiries. They assume a quasi-judicial character only after the issuance of notices for assessment. This is so, because the Assessing Officer is not a court. Similar findings have been given in Official Liquidator Liquidator of the Colaba Land Mills Co. Ltd. Vs. Deshpande (VM) 1972 83 ITR 685 (SC). ii) In Mahindra Mahindra Ltd. v. Union of India AIR 1979 SC 798 it has been held that though the AO has the same powers as are vested in a court for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information which he may not like to disclose to the assessee and he would be perfectly within his rights to refuse to disclose to the assessee the source of his information and the name of the informant. x) In Dinshaw Darabshaw Shroff v. CIT (1943) 11 ITR 172 (Bom.), the Hon'ble Bombay High court held that although an Assessing Officer making an assessment is not strictly acting as a court of law, it is clear from section 131, that he is acting in quasijudicial capacity, and he ought to conform to the more elementary rules of judicial procedure, and in particular to conduct the case himself, and not allow somebody else, even his superior officer, to interfere in the conduct of the case. In other words, the Authorities acting under the Income-tax Act have to act judicially and one of the requirements of judicial action is to give a fair hearing to a person before deciding against him. xi) In the case of S.S. Gadgil v. Lal Co. (1964) 53 ITR 231 (SC) Honible Supreme Court held that proceedings for assessment is not a suit for adjudication of a civil dispute. The argument that income-tax proceeding is in the nature of a judicial proceeding between the contesting parties, is a ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution of board of directors and consequent power of attorney in the assessee's favour. EFFECT OF CRIMINAL PROCEEDINGS ON INCOME TAX PROCEEDINGS: 6.7. The effect of parallel criminal proceedings on income tax proceedings has been rightly observed in the case of R.P. Vashisht Vs. DCIT (2006) 157 Taxman 301 by the Hon'ble Punjab Haryana High Court - the assessee was a State Government servant. Pursuant to a search conducted at the premises of the assessee, certain loose slips relating to expenditure incurred by him for renovation of his ancestral house were found. One diary indicating payment of illegal gratification to the assessee was also found with one 'S', the liaison agent for the companies supplying the electricity goods to the State Administration. The Hon'ble High Court upheld the decision of ITAT, holding that whether the illegal gratification was received by the assessee or not, might have to be decided in criminal proceedings, but for the purpose of income-tax proceedings, the material in hand was sufficient to fasten the tax liabilities upon the assessee. 6.8. In view of the above referred judicial authorities, the material available before the AO, is reliable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idences and concordance of dates between agreements, other material and various events lead to the process of drawing proper inferences, reckoning preponderance of probabilities, human conduct and surrounding circumstances. c. The letter of Sven Rhambergan and its contents have not been denied by the assessee. It is admissible material on record. d. The JPC Report, being an authentic report in public domain, is an admissible evidence. Whether it gives clean chit to the assessee or not will be dealt letter. e. The Hon'ble Supreme Court's observations during the proceedings for quashing the charge-sheet are straightway admissible. It refers to prima facie criminal case against assessee, the observations therein being on the same subject matter and the same person, based on same material, it is an admissible evidence. f. The Chargesheet filed by the CBI is admissible evidence. It refers to various enquiries and new facts. The contents and material therein has been held by the Supreme Court to constitute a prima facie criminal case against assesssee. The information contained in the charge sheet being from a Central govt. investigative agency, it is admissible and can be relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal. If the decision of the Tribunal also fails to satisfy him, he would be entitled to apply to the Tribunal for a reference on questions of law to the High Court. If the Tribunal refuses to make a reference, he would be entitled to apply directly to the High Court for an order to the Tribunal directing it to state a case. Thus there was no reason to entertain the writ petition at this stage. For all these reasons, the writ petition was wholly unsustainable, and was, therefore, dismissed in limine. SUSPICIOUS AND DIBIOUS TRASANCTION HOW TO BE DEALT WITH: 6.11. The tax liability in the cases of suspicious transactions, is to be assessed on the basis of the material available on record, surrounding circumstances, human conduct, preponderance of probabilities and nature of incriminating information/ evidence available with AO. 6.12. In the case of Sumati Dayal V. CIT (1995) 80 Taxman 89 (SC), the Hon'ble Supreme Court has dealt with the relevance of human conduct, preponderance of probabilities and surrounding circumstance, burden of proof and its shifting on the Department in cases of suspicious circumstances, by following observations: " .. It is, no doubt, true tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence of the principal fact. In the appreciation of circumstantial evidence, the relevant aspects, as laid down from time to time are ( 1 ) the circumstances alleged must be established by such evidence, as in the case of other evidence ; ( 2 ) the circumstances proved must be of a conclusive nature and not totally inconsistent with the circumstances or contradictory to other evidence. ( 3 ) although there should be no missing links in the case, yet it is not essential that every one of the links must appear on the surface of the evidence adduced ; some of these links may have to be inferred from the proved facts ; ( 4 ) in drawing those inferences or presumptions, the Authorities must have regard to the common course of natural events, to human conduct and their relation to the facts of the particular case. (5)The circumstantial evidence can, with equal facility, be resorted to in proof of a fact in issue which arises in proceedings for the assessment of taxes both direct and indirect, circumstantial evidence can be made use of in order to prove or disprove a fact alleged or in issue. In fact, in whatever proceedings or context inferences are required to be drawn f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its Report, which was forwarded by the Swedish Embassy in India to the Govt. of India. The relevant part is as under: "It may be seen from the report that AB Bofors claims no middlemen were involved during the final phase of the negotiations but that costs did occur in connection with the winding up of dealing with earlier local agents. These costs were finally settled during 1986. According to the National Audit Bureau Investigation, an agreement exists on settlement of commission subsequently to the howitzer deal and information exists that considerable sums have been disbursed referring to this contract. There have been other payments made by Bofors during the period in question, the purpose and recipient of which it has not been possible to clarify with the aid of the data available to the National Audit Bureau. Only AB Bofors is in a position to give a full account of its own payments. The Government ha, therefore, again urged AB Bofors to assist in shedding light on the matter." ii) Consequent to this Report, the Govt. of India, through the Defence Secretary, addressed a letter to the President of Bofors, Mr. Per Ove Morberg, on 16-7-1987, which, inter alia, stated as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cials, viz. Mr. Morberg,President; and Mr. Gothlin Sr. Vice President Chief Jurist of Nobel Industries (perhaps chief Legal Executive of Nobel Industries), who appeared before the Defence Secretary on 16-9-1987 and before the JPC on 18-9-1987, where the Chief Jurist of the company accepted the fact of payment of termination costs to three companies, whose names were not disclosed on the pretext of secrecy. The statement of Mr. Morberg, is of relevance. It is reproduced in the JPC Report, to the following effect: "7.61. While clarifying as to why the payments were made after the signing of the agreement, Mr. Morberg stated as follows: "We had to pay the termination costs in both the situations- if we have an order and if we do not have an order. Naturally there would have been another termination cost if we have not received an order. But termination costs we have had to pay in all cases." 7.62. About the currency in which the winding up costs were paid, the witness stated: "All our payments concerning winding up costs were paid in Swedish Kroner and they were paid through Swiss Banks." 7.63. As regards payments to M/s Anatronic General Corporation, the witness stated: "The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s The objectives of the Company are: (a) To establish, to promote and carry out import and export of securities, possessions and effects in all the branches; moreover the operations with financiers, capitalist, insurers, promoters of the share omission. (b) To establish companies, to construct, purchase, torent and load vapor boats or any kind of this, instead like airplane and ground transportation and used for transport crews or raw materials and any kind of products to any nature, between any country, port or airport in panama and all the world." Enquiries conducted in Panama revealed that the Company was managed by an advocate, Ms. Marccla Rozas de Percz, who was also acting as the local representative of the Company. The Investigating Agency also gathered that the President, the Vice President-cum-Treasurer and the Secretary of the company were all ladies and were not persons of any means and that is why her office address had been given as their address. Initially, Jose Antonio Valdes Dutary was the President of the Company, but later Ms. Carmen Fernandoz de Perez was made the President. The advocate informed that she had hired the Post Box for receiving the mail of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Bofors. However, M/s Credit Suisse, 2, Place Bol Air 1204, Geneva were aware of the transactions relating to receipt of payment by M/s MOINEAO SA. This Bank did not disclose any information to the Investigating Agencies on the ground that it would be a criminal offence under the Swiss Laws governing the banking secrecy, particularly under Section 271 and 273. Further, the manufacturers' Hanover Trust, 84 Rue du Rohne, Geneva (the second banker whose name was given by Bofors) did not have any transactions with MOINEAO SA or MORESCO or PITCO and no transactions were made through them by the aforesaid Companies to make payments to any Indian residing in India or outside India through their Branch. According to the Investigating Agencies, the functioning of this company seems to be mysterious as no trace of this company has been found at the address in Geneva given by Bofors. It seems that the Company registered in Switzerland is only a front organization being run for persons not residing in Switzerland. (c) M/s A.E. Services Ltd. The Investigating Agencies have found that a company called Target Practice Ltd. had been incorporated in London on 27th July, 1978 with a nominal ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would act as a cover. No Indian or any Indian legal entity, whether resident or non-resident in India, stated to be connected with the holding company CIAOU which stands for Consortium for Information Assimilation and Output Unit. This organization has a number of "units" in different countries (but none in India), consisting of lawyers, accountants, consultants and other experts to obtain vital information which is assimilated and processed into equipment; in other words- in case a manufacturer of defence equipment/ supplier is on the lookout for a market for his product, CIAOU helps "to open the door" to such markets. No Indian individual, received any payments whatsoever from the compensation given by Bofors to M/s A.E. Services Ltd.. (d) Anatronic General Corporation of Shri V.N. Chadha The enquiries made by the Investigating Agencies about the role of shri W.N. Chadha revealed that prior to 1984 Shri Chadha used to receive his commission through the Govt. of India, i.e. after the delivery was completed, the Company used to get 98% and 2% was given to him by the Government of India. However, in 1984, the position changed. He and other Indian representatives were barred from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia or any Indian associates in the large payments amounting to 319 million Swedish Kroners. M/s A.E. Services Ltd. one of the three companies has categorically stated that no payment has been made by them to any Indian residing in India or abroad or to any Indian associates and has even signed a declaration to that effect." 6.18. The assessee W.N. Chadha, went on refusing any knowledge or intimation about the above three Companies and stated that he had never met them and had never heard of them till the episode appeared in the newspapers. The JPC, however, on the basis of the information available to it, recorded its findings in respect of the assessee and M/s Anatronic General Corporation, as under: "7.196 The Committee find that prior to January, 1986 Shri W.N. Chadha was the Bofors' sole representative for the Republic of India under a Representation Agreement. The Agreement was signed in 1978 for a period of three years, was replaced by another Agreement in March 1981 and again in November, 1984. The contents of the Agreements appear to have remained the same except for the remuneration provided in form of commission on the value of sales. In the March, 1981 Agreement, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receive a commission on payments received by Bofors at the rate of 2 per cent under the March, 1981 Agreement till it remained in force, and one quarter of 1 per cent under the November 1984 Agreement till end of 1985. 7.198. The Committee find that Bofors paid a total amount of Rs. 59.20 lakhs to the A.G.C. (Anatronic General Corporation) and AGCPL (Annatronic General Corporation Private Limited) during the period 1979-87 (upto June, 1987). This includes an amount of Rs. 9.25 lakhs received by AGC as reimbursement of trial expenses for the gun during the years 1980-82. 7.199. On the basis of the foregoing, the testimony of Shri W.N. Chadha together with the testimony of the Bofors' representatives and the records furnished and evidence tendered by the officers of the Ministry of Defence, the Committee feel that Shri W.N. Chadha cannot be described as a middleman between Messrs A.B. Bofors and the Ministry of Defence Government of India. 6.19. The JPC was enquiring into the state of affairs at the relevant time in 1987 and 88, whereas the Income tax proceedings commenced much later. The JPC has given various findings to the effect that a lot of crucial information was not prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or has given findings constituting res judicata on the issues. Therefore, we do not find ourselves persuaded to hold that the JPC gave any clean chit to the assessee. 6.25. In view of these observations we are unable to hold that the JPC gave a clean chit to the assessee, or that its findings in any way exonerate the assessees liabilities and accountability in other proceedings including income tax proceedings. The JPC's findings nowhere claim to be applied as res judicata. Hon'ble Supreme court also, while rejecting assessee's petition seeking discharge from the criminal case, held accordingly. APPLICATION OF MATERIAL TO RELEVANT ISSUES OF THE CASE 6.26. Reverting to the original controversy, though Bofors accepts the above amounts were accordingly paid, but is trying to wriggle out of the situation by stating that the winding up charges were meant for services which are not performed by agents or middlemen. These payments as per Bofors, do not violate either Indian Defense policies or the covenants of the Agreement with Govt. of India in this behalf. Therefore. As per its stand, Bofors has neither mis reprsented nor committed any criminal act. 6.27. The clinching mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst normal human conduct. These are glaring inconsistencies in the explanations, due to which, the process and clock of adverse inferences gets triggered in the circumstances. 6.29. The AO in AY 1987-88, disallowed foreign travel expenses claimed as business expense by the assessee by making following observations: "12 FOREIGN traveling:" The expenditure under this head includes foreign visits undertaken by the assessee to Bankok, Manila and Hongkong for which the assessee could not adduce any evidence to prove the business expediency. Hence sum of Rs. 41,504/- incurred on foreign traveling to the aforesaid places is disallowed." The assessee, before CIT(A), made further submissions contending that these expenses were incurred to attend a Regional Conference of Defence Suppliers, on behalf of Bofors, at Mainta, Hongkong. CIT(A) allowed the assessee's claim of foreign travel expenses by observing as under: "98. Before me, the counsel has pleaded that the Assessing Officer has disallowed a sum of Rs. 41,504/- incurred by the appellant, on foreign traveling to Bangkok, Manila and Hong Kong. The appellant, who was representing Bofors was asked by them to attend their regional c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho deputed him to attend the Regional Conference to meet other suppliers on a principal to principal basis. v) The assessee continued to be the Bofors' agent and was entitled to appropriate remuneration. To bye pass law and policies same was camouflaged by splitting, paying minor part in India and major part by Svenka in Swizerland. 6.32. From the above, it is clear that both Bofors as well as the assessee have made incorrect statements in this behalf. It is natural that in such situations, parties do give self-serving statements. It is for the fact-finding authorities to ascertain the truth by lifting the corporate veil. 6.33. It may be recalled that despite the full knowledge about the Indian Defense Policy of 1985 to eliminate agents, Bofors' intimation about the liaisoning remuneration of one lakh sweedish kroners to Anatronic Corpn. for hotel bookings, fax etc., was a cover up, as Anatronic was neither a Company nor an incorporated entity but a proprietorship concern of Mr. Chadha, who in his individual capacity performed very important activities, like visiting defense establishments and high level conferences. This is not any inference drawn but the assessee's own admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings the exercise of deducing facts can be undertaken on circumstances and facts. 6.37. The Sweedish Govt, consequent to the Govt. of India's official request has come on record that commission was paid to the Indian agent of Bofors. The interesting question for consideration at this juncture is as to whether an official statement of a sovereign State can be relied on in tax proceedings. It will be pertinent to consider that the Swedish Govt. has very good relations with the Indian Govt., as its defense industries are major suppliers of armaments to India. The Swedish Govt. would not like to compromise it's Indian relationship by incorrect revelations about one supplier. If the statement of a sovereign govt. sent through diplomatic channels and that too on the request of Indian Govt., is not acceptable or reliable evidence in Indian tax proceedings, no case of cross-border tax evasion can ever be detected or proved. No burden can be cast on the AO in impossible terms. We see no reason to hold that the Swedish Govt. and its own Audit Department SNAB gave any wrong report by mentioning Indian agent as recipient. Besides, all the circumstantial evidence, as deliberated, leads to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities 6.41. All these facts and material available on record do not fit into the set up of human probabilities and surrounding circumstances to render assertions and statements made by the Bofors and assesses, as believable. 6.42. In our view, the Swedish Govt.'s Official communication, Sven Ramberg's normal and probable human conduct, the preponderance of probabilities, all read together harmoniously, clearly indicate the facts to be otherwise than those suggested. 6.43. We are conscious of the fact that the I.T. Deptt. was carrying out investigations in difficult circumstances ascribable to the sensitive nature of enquiries, their ramification on national politics and public perception. It was very difficult to get information and documents and to examine concerned links due to the premeditated surreptitious cover up of transactions and smokescreen corporate jugglery. There is no presumption in law that the AO is supposed to discharge an impossible burden to assess the tax liability by direct evidence only and to establish the evasion beyond doubt as in criminal proceedings. This is why Hon'ble courts by way of a catena of binding judicial pronouncements, have held that tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatever term may be used to describe such a relationship. The Bofors' President, at first blush, accepted that payments were made to its earlier agent in India. SNAB, on the basis of the statement and verification of the record gave a Report to the Swedish Govt., that payments were made in this deal. No name was mentioned. The Swedish Govt. acceding to the Indian Govt.'s request, sent this Report through the Indian Ambassador to Sweden. The CBI enquired into the matter. Letters Rogatory were issued by competent Indian court. On the basis of these inquests, it was revealed that the assessee did have a Swiss Bank Account. Existence of Svenska was accepted by Bofors and its main beneficiary was attributed to be the old Indian agent. Information received gave details of Bofors' invoices which were not denied. Amounts, dates and installments tallied. In our view the information of this magnitude and relevance demonstrates beyond question that the assessee was the recipient of this commission. "The Hindu" newspaper is a further corroboration of the facts which show that the assessee is the recipient. 6.48. Besides, from the grounds of appeal filed before us and those beforethe CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystem leads to an important adverse inference against the assessee. SVENSKA FACTS AND CONCORDANCE OF DATES 6.52. We have already held that the material available on record is admissible in income tax proceedings. Adverting to the alleged inconsistencies in the concordance table of dates, the fact is that many events tally and complement each other, which indicate that there was a palpable similarity in the events. The exception proves the rule. Some of the mismatches are bound to happen in such a mammoth investigation. 6.53. On the one hand Bofors desired to eliminate the middleman on paper and removed the assessee's name and brought in Anatronics, whose commission was reduced; whereas on other hand the corresponding reduction was paid to Svenska in its Swiss Bank Account which was to be operated by the assessee. Bofors claims that this is no coincidence that these are winding up/termination charges. The question is, if they were so conscientious why not informed the Govt. of India. In our view, the assessee and Bofors have failed to instill confidence in their statements, explanations and responses to successive disclosures during investigations. In our view, the concordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the past has been of Bofors' Indian agent in Defense Deals and it is hard to believe that the assessee was relegated to the position of a mere booking agent for hotels and errands and that an obscure Panama based company was paid the difference of commission. In view of the discrepancies and inconsistencies in the facts as projected, the misstatements given by the assesses from time to time, they cannot be relied on as being unworthy of credence. Under these circumstances, assessee's case has to be decided on the preponderance of probabilities, normal probable human conduct and the material on the record. 6.58. We have already mentioned AO is not concerned as to whether the assessee is held as a middleman or commission agent, or whether the actions are legitimate or against the Indian Defense Policy. His endeavor is to bring to Govt. the taxes which are due, an exercise far different than criminal or civil court proceedings. 6.59. All through, the assessee has demanded 'where are originals?' There has never been any challenge to the contents thereof as false or incorrect. It has to be borne in mind that the evidence has been collected by the JPC and by premier Investigatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is enough material on record to hold that the payments were indeed made by Bofors to Svenska AE Services and Moresco through the above Foreign Bank Accounts, in connection with the defense Deal with the Govt. of India. Merely by giving convenient alibis, like winding up or termination cost to these payments Bofors cannot escape from conclusion that these payments were made in relation to this Defense Deal, call it payment to winders up, terminators, or middleman, or agent. Therefore, the assessee is liable to pay income tax as determined by the AO in this behalf. WHETHER OTHER ENTITIES ARE AMENABLE TO INCOME TAX JURISDICTION IN BOFORS PAYOUTS 6.53. The subject matter from which these payments flew and a substantial part of the services rendered by assessee. A.E. Services, Ano, Moresco etc. pertain to this Indian Defense Contract, executed in India. All these entities are amenable to jurisdiction of Indian Income Tax Department, to bring to tax the amount which accrues or arises to them for these services, or is received, or it is deemed to be so by them. Indian income tax is leviable on all types of income, including legal and illegal income, whether recipients are Indian o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rolling the interest of an Indian company, from another foreign entity, by way of a contract executed in a foreign territory. Consideration of transfer war also paid and received in the foreign country. Jurisdiction was invoked by the Indian Income Tax Department against the purchaser on the issue that it had made the payments to a foreign national, without deducting and withholding tax called as TDS in India. The purchaser Vodafone challenged the jurisdiction contending that neither the contract nor the consideration, nor the seller, nor even the purchaser were located in Indian Tax jurisdiction and this being so, India had no jurisdiction on such transaction. Hon'ble Bombay High Court upheld the jurisdiction invoked by the Indian Tax Authorities. 6.66. In the Bofors supply case the fundamental contract was executed in India between Bofors and Defense Department. Payments were made from India and the services were to be rendered in India. All the incidental payments would have an Indian connection. Therefore, the Indian tax jurisdiction is squarely invoked. 6.67. Before us, neither of the parties has adverted to any other investigations. We are surprised to observe that though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but the order of assessment passed by the Assessing Officer on the dictates of the higher authorities being wholly without jurisdiction, it was a nullity. We, therefore, are of the opinion that with a view to do complete justice between the parties, the assessment proceedings should be gone through again by the appropriate assessing authority. 36. It is true that despite order passed by the High Court, CIT (Delhi) has not been impleaded. Presumably, because of the said defect in the order passed by the High Court of Himachal Pradesh at Shimla, revenue could not implead CIT (Delhi) as a party in the appeal. CIT (Delhi), however, has been impleaded as a party in the Special Leave Petition (SLP) filed by the Assessee. CIT (Delhi) has although in an irregular manner filed a rejoinder. Counter affidavit was filed by the assessee in the appeal preferred by the revenue and the same is on record. The said authority, therefore, is otherwise before us. 37. It is now well-settled that this Court in exercise of its extraordinary jurisdiction under Article 136 of the Constitution of India may, in the event an appropriate case is made out, either refuse to exercise its discretionary jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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