COMMISSIONER OF INCOME TAX Vs. NIKKO AUTO LIMITED

JUDGEMENT

(1.) THE Revenue has filed this petition under Section 256(2) of the Income-tax Act, 1961 (for short "the Act") seeking a direction to the Income-tax Appellate Tribunal, Delhi Bench "C", New Delhi (for short "the Tribunal), to draw up a statement of the case and refer the following question of law for the opinion of this court:

(2.) THE assessee-company carries on business of manufacture of automobile parts. It filed its return of income for the assessment year 1989-90 declaring a loss of Rs. 48.94 lakhs. THE assessment under Section 143(3) of the Act was completed on March 26, 1991, at a loss of Rs. 41/23,126. At the time of assessment an amount of Rs. 5,59,000 was disallowed under Section 40A(3) of the Act on account of 13 cash payments to a sister concern, Alpha Toyo Ltd. THE assessee had taken the plea that the amount had been paid in cash on each occasion at the insistence of the payee as it needed cash to make payments to sales tax, excise and customs departments as well as for labour payments. Alpha Toyo Ltd., duly confirmed that the payments had been made at their insistence. THE identity of the said party, which is a regular income-tax asses-see also stood established. THE Income-tax Officer, however, rejected this explanation as not satisfactory on the ground that "Alpha Toyo Ltd., is a company under the same management. Both the companies are having their bank accounts in Faridabad and payments could have been made through bank drafts or crossed cheques. THE total number of payments are 13 and this indicates that the default is not an isolated one."

(3.) THE Revenue filed an appeal before the Tribunal which upheld the findings of the Commissioner of Income-tax (Appeals). THEreafter the Revenue filed an application under Section 256(1) of the Act before the Tribunal requiring it to refer the aforesaid question of law for our opinion. THE prayer was declined vide order dated October 22, 1999, on the ground that the matter stood concluded by the judgment of this court and as such no referable question of law arose out of the order of the Tribunal. Hence, the present petition.