JASRAJ GANESHMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference application at the instance of the asses-see, Jasraj Ganeshmal, is filed under Section 256(2) of the Income-tax Act, 1961, seeking a direction to call for questions of law formulated in para. 12 of the application arising from the order of the Income-tax Appellate Tribunal, Jodhpur, dated April 12, 2001.

(2.) THE brief facts of the case are that the assessee-firm is mainly a commission agent selling deshi ghee of various brands on arhat/commission basis. During the year under consideration, the assessee made sales of deshi ghee on arhat/ commission to the tune of Rs. 191.61 lakhs. THE assessee also made sales on the assessee's own account during the year to the tune of Rs. 110.97 lakhs. THE assessee showed commission receipts of Rs. 4,22,391 as against Rs. 2,45,000 for the immediately preceding year. According to the assessee, immediately on effecting sale of consignor, the assessee sends sale list containing various details like date of sale, name of articles, number of tins, net weight, amount of sale consideration, details of expenses, etc., to the consignor/principal. THE assessee deducts its commission at 1 per cent out of sale consideration and remits the balance to the consignor/principal. During the assessment proceedings for the assessment year 1984-85, under appeal, the Assessing Officer found certain transactions made by the assessee with two sister concerns named (i) Sancheti Trading Co., (ii) Abhay Sales Agency, a proprietary concern of Shri Narendra Kumar, and one outsider named Shri Parasmal Kanaji to be sham and bogus just to avoid tax effect. THE Assessing Officer made addition of Rs. 2,73,809 treating the same as concealed income of the assessee in the shape of profit diverted in the name of Parasmal Kanaji and connected sister concerns.