9911796707
TMI Blog1997 (1) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... ding Company was for the purpose of business is based on any relevant material or arbitrary and thereby deleting the disallowance of Rs. 5,00,000 made in the assessment ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the consultancy fee of Rs. 7,50,000 paid by the assessee to Sri N. K. Tapuriah, a director of the company did not fall within the purview of section 40(c)(i) of the Income-tax Act, 1961, and thereby deleting the addition of Rs. 6,48,000 made in the assessment ? " The facts giving rise to the above two questions are these that under an agreement the assessee-company, viz., R. M. Investment and Trading Co. (P.) Ltd., was to render consultancy services to Boe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall pay to the former as under : (a) A sum of Rs. 40,000 (rupees forty thousand) per mensem commencing from the 1st day of May, 1983, till the termination of this agreement. (b) In case this agreement continues beyond the calendar year, 1983, a further sum of Rs. 5,00,000 (rupees five lakhs only) annually shall be paid by RMI to IPCO, in addition to the monthly amount of Rs. 40,000 (rupees forty thousand only) as stated in clause 4(a) above. . . . (e) (ii) A further sum in respect of sale of Boeing 757 to the Indian Airlines Corporation calculated at one per cent. of the amount of commission as and when received by RMI from Boeing Commercial Airplane Company. However, if the amount of total commission calculated as per sub-clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission and not for business purpose. For interpreting a document like this we have to see the other circumstances provided in the agreement. The agreement clearly provides that the sum of Rs. 5 lakhs which is to be paid annually to the IPCO Trading Company is in addition to Rs. 40,000 which is the service charge in case of continuance of the agreement beyond 1983 and this material alone shows that this payment was for the purpose of business. Another circumstance is that this payment of Rs. 5 lakhs is nonrefundable and such payment is not dependent upon the transaction of sale. In view of the materials, we are of the view that there were sufficient materials before the authorities below while arriving at the finding that a sum of Rs. 5 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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