COMMISSIONER OF INCOME TAX Vs. C.S. SRIVATSAN

JUDGEMENT

(1.) These 24 Tax Case Appeals have been filed by the Revenue, aggrieved over the orders passed by the Income Tax Appellate Tribunal, covering the assessment years 1996-1997, 1997-1998, 1998-1999, 1999-2000, 2000-2001 and 2001-2002, assessment having been made against each of the Directors, namely, C.S.Narasimhan, C.S.Srivatsan, C.S.Seshadri and C.S.Varadhan, (who are brothers), raising the following common substantial questions of law:-

(2.) The assessees in each of the batch of six cases are, C.S.Narasimhan, C.S.Srivatsan, C.S.Seshadri and C.S.Varadhan, who are the Directors of the Company, named, 'M/s. C.R.S. Sons & Co., Limited'. The company is engaged in the business of retail-selling of silk sarees and other textiles. The said company makes all purchases from M/s.Sri Sundaravalli Collections (SSVC), which is an entity of Hindu Undivided Family (HUF) of two of the Directors of the company. M/s.Sri Sundaravalli Collections pays guarantee commission to CRS holdings, an entity in which all the four brothers are partners, representing their minor HUFs.

(3.) The main contention of the learned counsel for the Revenue / appellant is that when the factum of each of the Directors, having received benefit towards the personal expenses, is not disputed, it is irrelevant and immaterial that the company has not claimed the amount as an expenditure in the profit and loss account of the company. When the payment of expenses is admitted, through whom it is paid is also irrelevant, i.e., whether such expenses were directly paid by the company or through franchisee (amount debited to the account of the franchisee).