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TMI Blog1986 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... ence on record or is otherwise unreasonable ? The facts which are material and the proceedings leading up to this reference are as follows : Mather Platt (India) Ltd., the assessee, carries on the business of manufacture and supply of, inter alia, food processing and other machinery. In the year 1974, the assessee sold and supplied to the Punjab State Co-operative Supply and Marketing Federation Ltd., M/s. Canners (India) Ltd. and the United Co-operative Distillery Ltd. certain machinery. The said transactions were effected by the assessee, respectively, through three commission agents, viz., Mintop Corporation of New Delhi, C. B. Singh of Lucknow and Vandana Sales Corporation of Bombay. The assessee paid commission to the said commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Assistant Commissioner disallowed the deduction of the commission paid. In respect of commission paid to C. B. Singh and Vandana Sales Corporation, it was held by the Inspecting Assistant Commissioner that as the assessee had failed to trace them, the correspondence filed by the assessee was not sufficient to establish the genuineness of the payments. It was noted that the income-tax file numbers of the said two agents had not been disclosed and, therefore, the assessee had failed to discharge its primary onus of establishing the identity of the agents or the genuineness of the payments. He disallowed the deduction also of the amounts paid to the said two agents by way of commission. Being aggrieved, the assessee preferred an appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner was otherwise satisfied that the Mintop Corporation was an existing organisation and had proceeded on that basis. In respect of C. B. Singh and Vandana Sales Corporation, the Tribunal noted that the Inspecting Assistant Commissioner had found that the said two commission agents were not in existence and the assessee had not discharged the burden of proving their identities. The Tribunal held that in order to claim deduction of the commission paid to the said agents, the assessee was required to establish their identity and that mere payment by an account payee cheque could not establish such identity The Tribunal set aside the order of the Commissioner (Appeals) and restored the order of the Inspecting Assistant Commissioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nual income of over Rs. 37 lakhs, there was no reason to doubt the genuineness of the two payments of commission amounting only to about Rs. 37,000. In support of his contentions, learned advocate for the assessee cited S. Hastimal v. CIT [1963] 49 ITR 273 (Mad). In this case, the assessee was called upon to explain the source of an amount credited in his books. The assessee contended that he had borrowed the amount from a party at Bikaner which had been paid by the agent of the creditor by a bank draft. The assessee supported his explanation by other documentary evidence. The explanation of the assessee was rejected by the Tribunal on the ground that the draft was not sent by the creditor but by some other person and it had not been poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Revenue contended to the contrary and submitted that it was for the assessee to establish the identity of its commission agents. In the facts, it was submitted that the assessee had failed to discharge the primary onus cast upon it. On a consideration of the facts and circumstances, it appears to us that by taking an overall view, it is found that the assessee had been entering into transactions in its regular course of business through commission agents and paying the agents' commission on the basis of the transactions had. In respect of commission paid to the two commission agents which are in dispute, the assessee had established that in 1974 the assessee was in correspondence with the said agents. The assessee had entered into t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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