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TMI Blog1971 (9) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Appellate Tribunal, Delhi Bench. As the facts in the case and questions of law sought to be referred were common, the following tabular statement will give an idea of the appeals filed by the three companies, who are the appellants together with the particulars regarding the years of assessment and Income-tax Case Numbers: C.A. No. I.T.C. No. Assessment year Name of company 1364/67 28-D/65 1952-53 Basti Sugar Mills 1365/67 27-D/65 1950-51 ,, 1366/67 23-D/65 1948-49 ,, 1367/67 21-D/65 1951-52 ,, 1368/67 20-D/65 1950-51 Nawabganj Sugar Mills 1369/67 25-D/65 1948-49 ,, 1370/67 26-D/65 1951-52 ,, 1371/67 24-D/65 1949-50 ,, 1372/67 29-D/65 1952-53 Punjab Sugar Mills 1373/67 22-D/65 1955-56 ,, The Basti Sugar Mills Company Ltd., which is the appellant in Civil Appeals Nos. 1364 to 1367, owned two sugar factories at Basti and Waltharganj. It is their case that for the purpose of selling their output of sugar they appointed selling agents at a commission of 12 as.% of all sales of sugar effected through the agents. Their selling agent prior to 1944 was M/s. Gursarandas Kapur & Sons at Kanpur. On July 26, 1944, by a resolution of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -53, the Income-tax Officer took the view that the selling agency commission claimed to be paid to the selling agents should not be allowed. Hence he issued a notice to the company under section 34(1)(a) of the Act and the company filed a return under protest. It may be stated that the managing agent of all the three appellant companies are M/s. Narang Brothers Ltd. and their chairman was Dr. Gokulchand Narang. The selling agent of the three appellants is also the commission agent, namely, M/s. Gokul Nagar Sugar Mills Co. Ltd. The controversy before the income-tax authorities related to the claim made by all the appellants for deducting as expenditure of the business of the companies, the selling agency commission paid to M/s. Gokul Nagar Sugar Mills Co. Ltd. In respect of some years the jurisdiction of the Income-tax Officer to take action under section 34 of the Act was also challenged. In respect of the assessment year 1952-53 relating to Nawabganj Sugar Mills Co. Ltd., the evidence, both oral and documentary, was let in by the assessee that M/s. Gokul Nagar Sugar Mills Co. Ltd. were the selling agents and that the commission paid to them as selling agents should be deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he result was that all the appeals filed by the three companies were dismissed. The assessee-companies filed applications before the Appellate Tribunal under section 66(1) to state a case and refer the following four questions to the High Court: "(1) Whether, in the facts and circumstances of the case, the Tribunal was justified in holding that no services were rendered by M/s. Gokul Nagar Sugar Mills Co. Ltd. to M/s. Nawabganj Sugar Mills Co. Ltd.? (2) Whether, in holding as they have done, the Tribunal was justified in giving its decision without taking into account the statement of Shri Ram Sahai Dhir and the receipts showing the commission paid to M/s. Gursarandas Kapur and some sub-agents of the recipient company? (3) Whether, in view of the facts and in the circumstances of the case, the Tribunal has rightly concluded that Dr. Sir G. C. Narang signed letters acting as the chairman of the Nawabganj Sugar Mills Co. Ltd., when he had no capacity to deal with the sub-agents in that capacity? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the provisions of section 34(1)(a) were rightly invoked?" By its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to act judicially and consider all the evidence in favour and against the assessee and that an order recorded on a review of only a part of the evidence and ignoring the remaining evidence, cannot be regarded as conclusively determining the questions of fact raised before the Tribunal. Mr. Desai, hence, urged that the High Court was not justified in declining to direct the Appellate Tribunal to refer questions Nos. 1 to 3. Mr. R. H. Dhebar, learned counsel for the department, has referred us to the findings recorded by the Income-tax Officer, the Appellate Assistant Commissioner as well as the elaborate discussion contained in the order of the Appellate Tribunal, and pointed out that all relevant material on record has been taken into account by all the authorities, including the Appellate Tribunal and that the appellants can have no grievance in that regard. All material facts have been considered and findings have been recorded on facts against the appellants that M/s. Gokul Nagar Sugar Mills Co. Ltd. rendered no service whatsoever as selling agent and that the materials on record conclusively establish that the appellants themselves were dealing with their sub-agents direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his evidence has clearly stated that he is the sole proprietor of M/s. Ramdev and Co. He has further stated that after he got the sub-agency from M/s. Gokul Nagar Sugar Mills Co. Ltd. he along with his brother and son formed a partnership for this purpose in the name of M/s. Ramdev and Co. The Appellate Tribunal in paragraph 7 of its order has considered a telegram sent on September 1, 1948, to M/s. Ramdev and Co. by the chairman of Nawabganj Sugar Mills Co. Ltd. That telegram states that the agency of M/s. Gursarandas Kapur and Sons has been terminated and M/s. Ramdev and Co. is asked to sell and freely secure challans. Ram Sahai Dhir in his evidence has stated that M/s. Gursarandas Kapur and Sons were the selling agent of the appellants originally and that he started his own sugar business in or about 1947. Therefore, the telegram, as held by the Appellate Tribunal, clearly shows that the appellants were having direct dealings with Ramdev and Co. and that M/s. Gokul Nagar Sugar Mills Co. Ltd. is nowhere in the picture. This telegram also shows that the privity of contract between the appellants and Ramdev and Co. will not be there if Ramedev and Co. were the sub-agents appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said to have in any manner vitiated the conclusion arrived at by the Appellate Tribunal. As we have stated earlier, we have only referred to these items of evidence on record to show that the findings of the Appellate Tribunal are based on the material on record and that the finding is such which could on that evidence be reasonably reached. The statement in the order of the High Court that the Appellate Tribunal has not referred to the evidence of Ram Sahai Dhir as such is, prima facie, correct. But, the High Court missed the crucial fact that his evidence is really as proprietor of M/s. Ramdev and Co. and the relationship between this company and the appellants has been considered by the Appellate Tribunal. As laid down by this court in Udhavdas Kewalram v. Commissioner of Income-tax, the Income-tax Appellate Tribunal has to act judicially in the sense that it has to consider with due care all material facts and the evidence in favour of and against the assessee and record its finding on all the contentions raised by the assessee and the Commissioner in the light of the evidence and the relevant law. From the discussion contained above it is clear that it cannot be said tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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