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1990 (9) TMI 116

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..... pire on 3rd June, 1977. However, w.e.f. 25th March, 1977 the rent was increased to Rs. 12,750. It was claimed that this increase was due to the efforts of one Raj Enterprises (hereinafter referred to as Raj), a partnership firm to which commission at the rate of half the above difference was claimed and was the subject matter of the above quantum appeal decided by the Tribunal. An agreement for payment of this commission was made with Raj effective from 1st Nov., 1978. Raj was brought into existence by deed of partnership dt. 21st Feb., 1978 which was given retrospective effect from 24th Oct., 1976. The Tribunal, inter alia observed from the above facts that the agreement with Raj was effective after the end of the previous year relevant fo .....

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..... s debited the commission payment of Rs. 24,750 to M/s Raj Enterprises in its accounts without obtaining any services from M/s Raj Enterprises, it has concealed the income as well as furnished inaccurate particulars of income to the extent of Rs. 24,750 and the ITO has rightly levied a penalty of Rs. 6,831 under s. 271(1)(c) of the IT Act, 1961." 3. Before the Tribunal, the assessee's counsel relied upon the same arguments as were advanced before the Commissioner. He submitted that for the asst. yr. 1980-81 half the assessee's claim was allowed and for asst. yr. 1982-83 it was allowed fully. For asst. yr. 1979-80. there was a disallowance but there was no penalty initiated. He pointed out that the receipt of commission by Raj was assessed .....

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..... re from the date on increase of the capacity." The assessee's counsel also relied upon the following decisions : Sir Shadilal Sugar General Mills Ltd. vs. CIT (1987) 64 CTR (SC) 199 : (1987) 168 ITR 705 (SC); Navnitlal K.Zaveri vs. CIT (1980) 16 CTR (Guj) 346 : (1980) 125 ITR 385 (Guj). The learned Departmental Representative submitted that the assessment order showed that relevant facts were not placed before the ITO before he made the enquiries. He emphasised that Raj did not have legal existence during the period relevant to the asst. yr. 1978-79 and, therefore, Raj could not have received the commission which showed that this was a false statement. He relied upon the following decisions : CIT vs. India Sea Foods 1976 CTR ( .....

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..... t was made. The assessee in the beginning has supplied such facts as were necessary according to him to support his claim. It was then for the ITO to make further query which he did and to which the assessee reopend as above. It was the assessee's case tha the commission had been paid. The Tribunal in the quantum appeals has not said that the commission had not been paid but that the rendering of services by Raj had not been satisfactorily established. It was on this question of rendering of services that the ITO made enquiries as above. 7. The case relied upon by the Commissioner and the learned Departmental Representative do not help the Revenue. In CIT vs. India Sea Foods as a result of certain disallowances and additions there was a .....

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