JUDGEMENT
S.K. Chander, Accountant Member -
(1.)(In the open Court) - This appeal by the assessee is directed against the order of the CIT(A)-VIII, New Delhi dated 11-1-1985 relating to assessment year 1981-82. The Memo, of Appeal indicates four grounds taken up in appeal by the assessee. However, at the time of hearing the learned counsel for the assessee specifically" sought our permission and it was granted for withdrawal of grounds serially numbered 1, 3 and 4. Therefore the ground which survives for our determination is that the Id. CIT(A) erred in upholding the disallowance of Rs. 3,69,824 paid to M/s. Niki Tasha (India) Pvt. Ltd. On this issue, we have heard, the parties. In order to appreciate the con-tentions and in this context the reasons recorded by the authorities below, we proceed to record them in the presence of the parties before us.
(2.)The Income-tax Officer made the impugned assessment on 19-9-1984 under Section 143(3) read with Section 144B of the Act. In this assessment he determined the total income of the assessee at Rs. 34,95,840 as against the loss return of Rs. 7,53,740 filed on 30th June, 1981. Apparently, in the process of assessment, the ITO considered various facets of the assessment including an issue relating to payment of commission by the assessee to the parties, which we would refer to in this order subsequently. In this appeal, we are only concerned with the payment of commission by the assessee amounting to Rs. 3,69,824 to M/s. Niki Tasha (India) Pvt. Ltd. The ITO has recorded the reasons for not allowing this commission at page 6 of the impugned asst. order under the title "Commission paid". We do not intend to burden this order with the reasons that he has given as we will be dealing with them while considering the submissions of the parties made before us. Suffice to say that for the reasons given in the asst. order, he added back this amount. The asst. as framed by the ITO included various other disallowances which we would not advert to in this order in view of the context of only ground of appeal taken before us here.
When that assessment was challenged in appeal before the CIT(A), the Id, Commissioner confirmed the order of the ITO disallowing the sum of Rs. 3,69,824 as he held that it cannot be said that any business expediency was involved in making the payments of the commission. In fact, he upheld the reasons given by the ITO in the impugned assessment for making the disallowance of this amount. The Id. CIT(A) also in passing referred to the similar payment made in the asst. year 1979-80 to Mrs. Ritu Nanda which he observed was held to be inadmissible in principle.
(3.)BEFORE us the Id. counsel for the assessee opened his arguments in chief with reference to these observations of the Id. CIT(A) and with reference to the order of the Income-tax Appellate Tribunal for the asst. year 1979-80, in 1TA Nos. 623 and 628 of 1983 being cross appeals, dated 16th February. 1985. It was pointed out in particular by the Id. counsel for the assessee that when the Tribunal came to consider the payment to Smt. Ritu Nanda the Tribunal came to the conclusion that she had not rendered any services for which the commission was claimed to have been paid to her. However, the Tribunal considered that she had rendered a service in introducing M/s. Asar & Co. of Iran to the assessee. According to the Id. counsel, the facts of the case for the payment of the impugned commission for the year under appeal are on a better footing and he proceeded to state so as under.
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