COMMISSIONER OF INCOME TAX Vs. THOBHANDAS JIVANLAL GAJJAR

JUDGEMENT

(1.) SHORTLY stated, the facts leading to these two references are as under : The relevant assessment years are 1957 58 and 1958 59. The assessee of IT Ref. No. 208 of 1974 is a building contractor and he undertakes construction works of the Government and semi Government bodies. For the asst. year 1957 58, he had undertaken the construction works which are broadly known as " N" group and "B" group works. He also entered into a sub contract with M/s Allied Construction Co., for the construction work known as "O" group work. Assessee, Thobhandas J. Gajjar, of IT Ref. No. 45 of 1974 was also carrying on the business of construction works in partnership under the name and style of M/s Gajjar & Co., and he entered into a contract with the erstwhile Bombay Housing Board for purposes of constructing 2,136 tenements at Bapunagar, Ahmedabad, in February, 1955. The contract was entered into with the Housing Board in the name of Pravin Construction Company. This contract is known as " P" group contract.

(2.) BEFORE the ITO, it was contended on behalf of Shri Thobhandas J. Gajjar that he had assigned the said contract to one Shri Vasantlal who was the proprietor of M/s Vasant & Co. for a consideration of payment of commission of 2 1/2per cent to the said Shri Gajjar. This Vasantlal happened to be the brother in law of the assessee, Popatlal Panachand Shah of IT Ref. No. 208 of 1974.

(3.) SIMILARLY , at the instance of the Revenue, the following question has been referred to us in IT Ref. No. 45 of 1974 :