K R MOTILAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AS per the directions of this court in T.C.P. No. 227 of 1979, at the instance of the assessee under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Madras Bench "C", has stated a case and referred the following question of law for the opinion of this court :

(2.) THE assessee is an individual and he is carrying on the business of manufacturing three wheeler cycles. THE assessee declared an income of Rs. 21,000 as the assessable income for the assessment year 1975-76. While arriving at the abovesaid taxable income, the assessee had shown to have paid a sum of Rs. 23,024 to his brother, K. R. Madhukar, as remuneration for technical and supervisory services rendered by him and a sum of Rs. 21,412 to his another brother, K. R. Vijayakumar, as commission for services rendered by him in the business carried on by the assessee for the assessment year 1975-76. THE assessee had shown to have paid a sum of Rs. 13,908 and Rs. 12,000 to his brothers, K. R. Madhukar and K. R. Vijayakumar, towards remuneration and commission, respectively, during the previous assessment year.

(3.) THE fact remains that the assessee owns a business of manufacturing of three wheeler cycles and he declared an income of Rs. 21,000 as assessable income for the assessment year 1975-76. It is not in dispute that the assessee had claimed to have paid a sum of Rs. 23,024 towards remuneration of his brother, K. R. Madhukar, for the alleged technical and supervisory services rendered by him to the assessee during the abovesaid assessment year, as against a sum of Rs. 13,908 shown as remuneration to K. R. Madhukar for the previous assessment year. Likewise, the assessee had claimed a deduction to an extent of Rs. 21,412 towards commission payable to his another brother, K. R. Vijayakumar, for the services rendered by him to the assessee in the abovesaid business during the assessment year 1975-76 as against a sum of Rs. 12,000 paid as commission paid to him in the previous assessment year.