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TMI Blog1986 (7) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ted company carrying on the business of printing and supplying bidi labels and such work is undertaken for the firm, M/s. Mohanlal Hargovind Das, bidi manufacturers. The assessee-firm, M/s. Anand Jyoti Printers Private Limited, Jabalpur, has 1,000 equity shares of which 535 shares are held by Shri Parmanand Bhai Patel who is carrying on the business of bidi manufacturing, 63 shares are held by his sister, Shrimati Madhukanta Patel, the wife of Shri R. P. Patel, the manager of the assessee-company, M/s. Anand Jyoti Printers. Thus, by relationship, the manager of this company, Shri R. P. Patel, is the brother-in-law of Shri Parmanand Bhai Patel. The relevant assessment years are 1963-64 and 1965-66 to 1968-69. During these years, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court by framing and referring the legal question referred to above, for our reply. On the other hand, Shri B. K. Rawat, appearing for the Revenue, argued that in the facts and circumstances of the case, when it was not brought on record that Shri R. P. Patel had acquired any extra-technical skilful knowledge in carrying on the business of printing press, the commission paid is not liable to be deducted under section 36(1)(ii) of the Act. After hearing the assessee's counsel, Shri H. S. Shrivastava, and Shri B. K. Rawat for the Revenue, we have reached the conclusion that this reference has to be answered in the affirmative and in favour of the Revenue, i.e., the commission so paid to the manager, Shri R. P. Patel, was not an allowabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Patel, the payment of commission, in addition to his salary and bonus, had become expedient. Although it was argued that the petitioner-company's manager, Shri R. P. Patel, acquired special qualifications from the German technician, yet nothing has been filed on record to show what extra technical educational qualifications were acquired by Shri R. P. Patel. On the other hand, the record bore out that he was simply a matriculate and the German technician had come only to instal the printing machine and not to import any technical education to Shri R. P. Patel or to any one of the staff members working in the printing press. The German technician who installed the machine might have left some brochures, but that does not mean that by re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionship, though it may not be covered fully within the meaning of section 2(4 1) of the Act. Pertaining to the previous assessment years, i.e., right from 1961-62 to 1964-65, the matter in issue relating to the deduction of payment of commission was considered by a Division Bench of this court in Miscellaneous Civil Case No. 17 of 1970 dated November 6, 1975, between the same parties, and it was held that the payment of commission to Shri R. P. Patel was on account of extra-commercial considerations because of the relationship of Shri R. P. Patel and Shri Parmanand Bhai Patel, and not due to extra-technical educational qualifications of Shri R. P. Patel. After this decision, nothing has been shown or brought on record by leading any evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission from the company and as such the amount paid towards commission, so far as has been paid to him, is not allowable as deductible expenditure under section 36(1)(ii) of the Act. At this juncture, dealing with this aspect, it will not be out of place to state that in this modern era of socialistic pattern of society, when our country is passing through a transitory period of overall development, paramount preferences have to be given to rapid industrialisation. In our fast developing country, employees/workers are the backbone of the industry, without whose toil the employer cannot amass good fortune and, therefore, it would be in consonance with the Gandhian economic concept and modern socialistic thought, which has its deeply roo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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