- (1.) THESE three appeals seek to challenge the order of the learned Income -tax Appellate Tribunal, dated July 14, 2003, deciding three appeals numbers 300 to 303 (JP) 2002.
(2.) ALL these appeals were admitted on November 18, 2003, by framing the following substantial questions of law: 1. Whether the learned Income -tax Appellate Tribunal had material and were right in law in sustaining disallowance of Rs. 3,03,475 being commission paid to M/s. Laxmi Stone Pvt. Ltd.? 2. Whether the finding that the appellant could not give specific evidence regarding nature of services rendered by the said company is without evidence and contrary to the evidence on records, are perverse and have vitiated the conclusion? The precise controversy relates to the disallowance of the commission paid by the assessee to M/s. Laxmi Stone Pvt. Ltd., in the three relevant assessment years. The claim of the assessee had been, that when the company was formed, an Indian machine was installed which was previously imported, and there was an understanding between the firm, and the shareholders, that in case the machine is successful, more plants will be sold, and the firm will give commission, and they will promote their sales. It is claimed that the commission in question was paid in this regard.
(3.) THE learned Assessing Officer had disallowed the commission, inter alia, finding that the company is a sister concern of the assessee -firm, and that no contract is shown to have been entered into between the assessee -firm and the company, that the assessee has simply resorted to device to reduce its income, and the payment is a bogus one. The other ground given is, that an opportunity being given the assessee failed to produce any evidence regarding the details of the work done of the company, what was value of the goods, and service, given by the company, what was the market value of the goods, and services, given by the company, and whether such goods and services, provided by the company, resulted in any profit to the assessee. Then the provisions of Section 40A(2)(a) have also been considered, and the amount was disallowed as bogus payment.;