Delhi High Court
Shri P.N.Sehgal Thru Shri Vikram ... vs Commissioner Of Income Tax on 31 July, 2008
Author: Badar Durrez Ahmed
* THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on : 31.07.2008
+ ITA No.607/2006
SHRI P.N.SEHGAL THRU ..... Appellant
SHRI VIKRAM SEHGAL
versus
COMMISSIONER OF INCOME TAX ..... Respondent
Advocates who appeared in this case:
For the Appellant : Mr.M.K.Arora
For the Respondent : Mr.R.D.Jolly
CORAM :-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE RAJIV SHAKDHER
1. Whether the Reporters of local papers may
be allowed to see the judgment ?
2. To be referred to Reporters or not ?
3. Whether the judgment should be reported
in the Digest ?
BADAR DURREZ AHMED, J (ORAL)
1. The issue involved in this appeal is with regard to payments
made by the assessee to Kush Printers Pvt. Ltd and Rathi Industries
Ltd. According to the assessee, these payments were made by way
of commission for services rendered by the said parties. The
assessee books advertisements which are placed in various
publications and journals. In the present case, it is the assessee's
contention that Great Eastern Impex Pvt. Ltd was introduced to the
assessee by Kush Printers Pvt. Ltd. Thereafter the assessee obtained
orders from Great Eastern Impex Pvt. Ltd and placed the same in
various journals and publications for which the assessee received
commission from the said journals and publications. Out of the said
commission the assessee paid part of the commission to Kush
Printers Pvt. Ltd for having introduced the assessee to Great Eastern
Impex Pvt. Ltd. Although there was no written agreement between
the assessee and Kush Printers Pvt. Ltd there was an understanding
that 10% commission would be paid by the assessee for all business
which is been procured through them and relating to Great Eastern
Impex Pvt. Ltd.
2. In the impugned order it has been noted by the Tribunal that
the payment made to Kush Printers was through drafts and that Kush
Printers Pvt. Ltd had even shown the said payment as income and
they had been assessed to tax. Despite this finding, the Tribunal
came to the conclusion that the assessee was unable to establish that
the payment was made to Kush Printers Pvt. Ltd for having rendered
services to the assessee.
3. The second payment with which this appeal is concerned, is
the payment of commission to Rathi Industries Limited. The case of
the assessee is that Rathi Industries Limited was paid commission by
the assessee for having introduced the assessee to the Ministry of
Labour, which placed orders on the assessee and, in turn,
advertisements were booked in various publications and journals by
the assessee. As in the case of Kush Printers, the assessee paid
commission to Rathi Industries Limited out of the commission
received by it from the various publications and journals. It is the
case of the assessee that there was a written agreement between the
assessee and Rathi Industries.
4. It may be noted that it is not in dispute that there were written
confirmations from both Rathi Industries Limited and Kush Printers
Pvt. Limited. Copies of the said confirmations are at Pages 87 and
88 of the present paper book. They indicate the income tax numbers
and the wards where the assessments of the said Rathi Industries
Limited and Kush Printers Pvt. Ltd. are carried out. According to
the appellant/assessee, it had done all that it could do to establish
that the said payments were made by way of commission for
services rendered by the said parties.
5. Having gone through the impugned order, we are of the view
that certain material which had been placed by the assessee on
record which would go to establish the assessee's case has not been
considered by the Tribunal and a finding has been returned adverse
to the assessee by ignoring such material. Consequently, we feel that
it would be appropriate that the matter is remanded to the Tribunal
for considering the entire material on record including the
confirmation letters and returning a finding in respect thereof. We
set aside the impugned order on the findings noted above. The
matter stands remanded to the Tribunal, as stated above, for afresh
adjudication on these issues.
6. In view of this order CM No. 4693/2006 also stands disposed
of.
BADAR DURREZ AHMED, J
RAJIV SHAKDHER, J
July 31, 2008
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