COMMISSIONER OF INCOME TAX Vs. LEKHRAJ AND SONS

JUDGEMENT

(1.) AT the instance of the Revenue, the following questions have been referred for the opinion of this court under s. 256(2) of the I.T. Act, 1961 (hereinafter referred to as "the Act") :

(2.) WHETHER, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the onus is on the Department to prove that the firm, M/s. Ramchand and Company, was not a genuine firm carrying on business and the payment of commission and interest by the assessee-firm to M/s. Ramchand and Company was during the course of its regular business ?

(3.) INASMUCH as the Tribunal had not adverted to the aspect relating to the genuineness of M/s. Ramchand and Company, Bombay, its conclusion that the inclusion of the income of M/s. Ramchand and Company with that of the assessee is not proper or correct cannot be stated to have been based on valid or proper materials. On the basis of the order of the Tribunal, as it is, no answer can be rendered with reference to questions Nos. 2 and 3. In CIT v. Greaves Cotton and Co. Ltd. , the Supreme Court has laid down the proper course to be adopted in such cases in the following terms at page 209 :