Delhi High Court
Commissioner Of Income-Tax vs Dalmia Cement (Bharat) Ltd. (No. ... on 12 August, 1987
Equivalent citations: 1988 173 ITR 89 Delhi
Bench: P Bahri, S Ranganathan
JUDGMENT
1. Four questions have been suggested on behalf of the Commissioner. So far as question No. 1 is concerned, we reject the application following our order in ITC No. 173 of 1984 (CIT v. Dalmia Cement Ltd. (No. 1) [1988] 173 ITR 87 (Delhi)). Question No. 3 is directly governed by the principles laid down by the Supreme Court in Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 and calls for no reference. So far as question No. 4 is concerned, the circumstances are similar to what has been dealt with in the order dated April 9, 1987, in ITR No. 49 of 1984 (CIT v. Master Gaurav Dalmia [1987] 168 ITR 458 (Delhi)). Therefore, reference of this question is also not called for.
2. This leaves only question No. 2 suggested on behalf of the petitioner. This question which has been raised no doubt appears to be a question of fact. Mr. Harihar Lal, learned counsel for the respondent, strongly contended that the Income-tax Officer has not doubted that services were, in fact, rendered by the field organisers and the mere fact that the sole selling agency was abolished does not mean that the payments to these persons were not genuine. He has argued that the sole selling agents were primarily concerned with the booking of orders but there were various other services to be rendered and a lot of material had been placed before the Income-tax Officer and Commissioner of Income-tax to show that the services were in fact rendered by these field organisers. There is some force in this contention. But, after having carefully perused the orders of the Income-tax Officer, Commissioner of Income-tax (Appeals) and the Tribunal, we have not been able to come across any positive material to show that the field organisers did render services. The Income-tax Officer did not give a categorical finding that these field organisers had not rendered any services. But he did come to the conclusion that these field organisers had been appointed by the assessed by way of a mask or facade to get over the abolition of the sole selling agency by the Government. The Commissioner of Income-tax does not appear to have applied his mind to the material available, if any, to show that services were rendered. He also seems to have proceeded on the simple basis that the Income-tax Officer had not doubted that services had been rendered. The Tribunal in its order has endorsed the finding of the Commissioner of Income-tax. They also make a mention of a reference by the assessed to some voluminous record lying at the factory at Dalmiapuram having been made before the lower authorities but it does not appear from the record that these records were either produced before the authorities or examined by them. In our opinion, the matter needs to be looked into in greater detail and possibly it can be elucidated by the Tribunal at the stage of submitting a statement of the case. The Tribunal can, at the request of the assessed, forward to this court material which was placed by him before the Income-tax Officer, Commissioner of Income-tax as well as the Tribunal on the basis of which the assessed sought to contend that services had been rendered by these field organisers. Under these circumstances, we direct a reference of the following question for the decision of this court :
"Whether, on the facts and in the circumstances of the case, there was any material on record to hold that the payment of Rs. 1,83,000 to the field organisers was made for services rendered and eligible for deduction as a genuine business expenditure ?"
3. The Tribunal is directed to state a case and refer the above question for the decision of this court. The application is disposed of. No costs.
