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TMI Blog2019 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the authorities below were based on proper appreciation of facts, material available on record and surrounding circumstances, it would not call for any interference - doubtful nature of transaction and the manner in which the sums were found credited in the books of accounts maintained by the assessee had been duly taken into consideration by the authorities below and the transaction though apparent were held to be not real one. It was further pointed out that it may be the money came by way of bank cheques and paid through the process of banking transaction but that itself is of no consequence. This decision applies on all fours to the assessee's case where also the assessee pleaded that the amounts paid as service charges to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was selected for scrutiny, in response to which the assessee's authorized representative and the Director appeared before the Assessing Officer and answered the queries raised by the Assessing Officer. The Assessing Officer noted that the main source of income of the assessee Company is by way of service charges received from its clients mainly from Corporate Sector for providing financial services like arranging credits investment advise, etc. For the previous year relating to the assessment year 1990-91, the assessee had admitted a gross receipt of service charges amounting to ₹ 17,69,638.65. It also claimed payment of service charges amounting to ₹ 5,02,077.70 and the net amount of ₹ 12,67,560.95 was shown in the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed and therefore, the Assessing Officer committed an error in disbelieving the stand taken by the assessee. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Sassoon J.David Co. P. Ltd vs. Commissioner of Income Tax [(1979) 118 ITR 0261(SC)] . In the said decision, it was pointed out that an attempt was made in the IT Bill of 1961 to lay down the necessity of the expenditure as a condition for claiming deduction under Section 37. Section 37(1) in the Bill read any expenditure ..... laid out of expended wholly, necessarily and exclusively for the purposes of the business for profession shall be allowed.... It was further pointed out that the introduction of the word necessarily in the section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have pointed out about the various persons who were summoned by the Assessing Officer and statement was recorded. Those persons though admitted that they have received money from the petitioner were not aware for what purpose the same was paid and most surprisingly many of them did not know what is their line of business. Therefore, the assessee had set up a false case with a view to avoid the tax liability. 7.Reliance was also placed on the decision in the case of Commissioner of Income Tax vs. Devayhi Beverages Ltd. [(2008) 2896 ITR 0041 (Del)] . We find that the decision can hardly help the assessee on account of the factual position therein where the Court found that the assessee therein engaged in manufacture and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks of accounts maintained by the assessee had been duly taken into consideration by the authorities below and the transaction though apparent were held to be not real one. It was further pointed out that it may be the money came by way of bank cheques and paid through the process of banking transaction but that itself is of no consequence. This decision applies on all fours to the assessee's case where also the assessee pleaded that the amounts paid as service charges to those third parties should disclose the same in their income tax return. This can hardly validate such invalid and doubtful transactions. 10.In the light of the above discussion and noting that the two authorities and the Tribunal concurrently on facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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