Sudhindra Mohan Guha, J. - (1.) The assessee is M/s. Birla Jute Manufacturing Company Ltd. and the relevant assessment years were 1961-62 to 1968-69. Accounts had been maintained on mercantile basis and the assessee followed financial year as its previous year.
(2.) In the course of the assessment proceeding for the assessment year 1967-68, which was completed under Section 143(3) of the I.T. Act, 1961, the ITO noticed the payment of salary of Rs. 30,000 to Smt. Kamala Devi Saboo and Rs. 36,200 to Sri S. P. Chhaochharia. Mrs. Kamala Devi Saboo was the wife of Sri T. C. Saboo, a top executive of the assessee-company, and, according to the ITO, he was a man of eminence in the Birla organisation. Mr. Saboo had been in the employment of the assessee-company since 16th September, 1960. As regards Sri S. P. Chhaochharia, he was the son of Sri R. K. Chhaochharia, President of the assessee-company, and had been in its employment since 31st March, 1963. It was represented before the ITO that Mrs. Saboo was appointed in the company to look after labour welfare and also to attend to matters relating to labour relations. As to the services rendered by the lady, copies of two letters written respectively by Sri Haralal Halder and Sri Indramani Jana were produced.
(3.) It was found by the ITO that these two letters dated 21st February, 1968, were written on a date when enquiries regarding the payment of salary to the lady were already afoot. As such, he refused to attach any evidentiary value to these two letters and specially so when there was absolutely no proof as to the actual services rendered by her.;