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TMI Blog1984 (3) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ively laid out for business. The ITO assessing the company disallowed the expenditure on the ground that the payments were made for extra-commercial considerations. The finding of the ITO was ultimately sustained by the Tribunal. On a reference, the High Court declined to interfere with the finding of the Tribunal. The income-tax assessment of Sri A. L. Goenka for the assessment year 1969-70 was completed on February 7, 1970, on a total income of Rs. 71,395. A notice was issued on March 28, 1974, under s. 148 of the I.T. Act seeking to reopen the assessment of Sri A. L. Goenka for the assessment year 1969-70 on the basis of the information received from the ITO who had passed the assessment orders in the case of Indian Press Exchange Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ayres [1963] 41 TC 389, 400 (Ch D). " These transactions, when seen in the context of the company's trading operations, cry aloud for an explanation. " In the assessment of the company, the explanation that was given was disbelieved and the claim for deduction of the amount as having been spent wholly and exclusively for the purpose of business was disallowed. But no other material has come to light to explain this uncommercial bounty. The question that is now being raised before us is whether there is any material to believe that the amounts that were shown to have been paid to the two minor sons of Sri A. L. Goenka were, in fact, paid to Sri A. L. Goenka and the income was liable to be assessed as benami income of Sri A. L. Goenka. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the company for good reasons. But that cannot by itself be the basis for believing that it was Sri A. L. Goenka who was the real recipient of the amounts. In the judgment under appeal, it was held that if relatives of influential persons were paid salaries and commission by companies because of the power and influence of those influential persons, it did not follow that the payments were really made to those influential persons and not to the relatives. We are in agreement with this view. In our opinion, there is no material for the formation of the requisite belief for issuing the impugned notice under s. 148. The appeal is dismissed. There will be no order as to costs. SATISH CHANDRA C. J.-I agree. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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