SUHASINIBAI GOENKA SMT Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question is referred to us by the Tribunal :

(2.) THE facts of the case are that, according to the assessee, her husband was managing the work of her factory and was procuring work for it also for which the remuneration in question which was claimed as business expenditure was paid to him during the asst. yrs. 1974 75 and 1975 76. The learned ITO disallowed the claim for both the above assessment years. However, in appeal against his order for the asst. year 1974 75, the learned AAC reversed the finding of the learned ITO and allowed the commission paid to the husband of the assessee as business expenditure. In taking the above view, the learned AAC relied upon the fact that in the earlier years, the assessee was incurring losses whereas in the year in question she earned huge profits because her husband who was an influential person procured voluminous work for her factory. He also referred in this regard to the statement in the written submissions of the assessee to the effect that because of the efforts of her husband she could obtain work for her factory which otherwise would have gone to Malkapur. He then held that the commission paid to the husband of the assessee in 1974 75 was not for personal considerations but was for the business purpose of the assessee. The Department, feeling aggrieved, challenged the above view of the learned AAC by filing an appeal before the Tribunal.

(3.) IT is thus clear that the learned AAC had taken contradictory views for the above two asst. yrs. 1974 75 and 1975 76, on the question of admissibility of the remuneration paid to the husband of the assessee as being business expenditure. It, therefore, appears that in order to substantiate her case, the assessee filed considerable documentary evidence before the learned Tribunal during the hearing of the rival appeals by the parties for the above asst. yrs. 1974 75 and 1975 76. The learned Tribunal, however, did not permit the assessee to produce the additional evidence at such a late stage before it since she had not given any reason for not producing the same before the authorities below and particularly when she was not prevented from doing so. On the merits, the learned Tribunal held that except her assertion the assessee had not produced any material to substantiate her claim that she could get voluminous business because of the influence of her husband and that there was any long standing practice in the line of her business to give such commission. It also held that in view of the practice of the Maharashtra State Co operative Marketing Federation to distribute the work amongst all the ginning and pressing factories according to their capacity it could not be said that the husband of the assessee procured any business for the assessee. It thus affirmed the orders of the learned ITO for both the assessment years. It is on the basis of the above facts and circumstances that the above question is referred to us for consideration.