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TMI Blog1990 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... otel business in different places. He was carrying on business at Ceylon and was being assessed as a non-resident. He wound up his business at Ceylon, returned to India on October 10, 1971, and thereafter settled down at Tiruchirapalli. By his letter dated December 9, 1971, he informed the Income-tax Officer that he had brought from Ceylon Rs. 2,30,000 being the sale proceeds of the business carried on by him there and that he had invested the same in the manner indicated therein. In the course of assessment proceedings for the assessment year 1972-73, the assessee claimed that he had sold the business at Ceylon for Rs. 2,30,000 and got the money repatriated, though not through the normal channel. The Income-tax Officer, despite doubting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that it would not be unreasonable to hold that a sum of Rs. 40,000 had been paid by the assessee by way of commission for repatriation and in that view sustained the addition of Rs. 40,000 under the head "Other sources". That is how the question set out earlier has arisen. Learned counsel for the assessee, relying upon the circular issued by the Central Board of Direct Taxes in F. No. 222/7/70-IT( A-II) dated August 5, 1971, contended that it is not open to the Revenue to go into the question of payment of commission and that the view taken by the Tribunal that a sum of Rs. 40,000 should have been paid by the assessee as commission for repatriation is also not supported by any material. On the, other, hand, learned counsel for the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anner indicated in his letter. Inasmuch as the amount claimed by the assessee to have been repatriated was in excess of Rs. 50,000, paragraph 2 of the circular referred to above would stand attracted. The very purpose of the circular is only to avoid inconvenience that may be caused to persons of Indian origin migrating from Ceylon in their income-tax assessments in India, owing to the absence of direct or documentary evidence in the shape of transfer through banks, hundis, etc., in support of remittances from Ceylon and not to insist upon the same. However, in paragraph 2 of the circular, repatriation of funds from Ceylon will be accepted by the Income-tax Officer only on production of adequate evidence by the assessee to the effect that h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from ascertaining the exact quantum repatriated. We are, therefore, unable to agree with learned counsel for the assessee that by reason of the circular, the Revenue cannot proceed to determine the quantum of repatriation through irregular channels. We may now proceed to consider the claim of the assessee that commission was paid in Ceylon. Regarding this, it is seen from the assessment order that the assessee, in the course of his statement made on March 17, 1975, deposed that he could not remember the names and addresses of persons in Ceylon or the amount of commission paid to them for helping to get the money repatriated to India. We are of the view that the assessee would not have had any difficulty in naming the persons to whom the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repatriated was not only Rs. 2,30,000 as claimed by the assessee, but something more, including the commission paid for such repatriation. The Income-tax Officer estimated the commission paid by the assessee at Rs. 1,15,000 and it was rightly characterised by the Tribunal as excessive. Though the assessee claimed that only 10 per cent. of the amount repatriated was usually paid as commission, it is seen that if large amounts are repatriated, the commission paid also varies. Considering all the facts and circumstances , we are of the view that the estimate by the Tribunal of the commission paid by the assessee at Rs. 40,000 for repatriation of funds from Ceylon cannot be characterised to be either erroneous or otherwise excessive or even no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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