- (1.) These ten appeals, by special leave, are directed against the common judgment and order dated March 14, 1967 of the Delhi High Court declining to direct the Income-tax Appellate Tribunal, Delhi Bench, to refer along with the statement of case, questions Nos. 1 to 5 enumerated in their applications.
(2.) The reference was asked for by the three different Companies by whom the above appeals are filed in respect of Income-tax case No. 20-D of 1965 connected with I.T.C. Nos. 21-D to 29-D of 1965 arising from a common order of the Income-tax Appellate Tribunal, Delhi Bench. As the facts in the case and questions of law sought to be referred were common, the following tabular statement will give an idea of the appeals filed by the three Companies, who are the appellate together with the particulars regarding the years of assessment and income-tax case numbers :-
(3.) The Basti Suger Mills Company Limited which is the appellant in Civil Appeals Nos. 1364 to 1367 owned two sugar factories at Basti and Waltharganj. It is their case that for the purpose of selling their out put of sugar they appointed Selling agents at a commission of 0-12-0 per cent of all sales of sugar effected through the agents. Their Selling agent prior to 1944 was M/s. Gursarandas Kapur Sons at Kanpur. On 26, 1944 by a resolution of the Board of Directors, the Company appointed M/s. Gokul Nagar Sagar Mills Co. Ltd., as the Selling agents at 0-12-0% commission. In the course of the original assessment for the year 1947-48, which was completed on March 10, 1950 the Income-tax Officer called upon the said Company to furnish details of the item of work done by M/s. Gokul Nagar Sugar Mills Co. Ltd. as Selling agents. The Company informed the Income-tax Officer that the said Selling agents have been doing the work that they were expected to do and they in turn had appointed sub-agents on commission basis for effecting sale at various places. The Income-tax Officer accepted this explanation and allowed, by order dated June 21, 1949 a deduction for Rs. 47,921/- paid as commission to the selling agents. But when the assessment proceedings for the assessment year 1952-53 in respect of Nawabganj Sugar Mills Co. Ltd. was being dealt with, the Income-tax Officer took the view that the selling commission should not be allowed and accordingly issued a notice dated March 29, 1954. under sec. 34(1)(a) of the Income-tax Act, 1922 (hereinafter to be referred as the Act). The Company filed a return under protest.;