Commissioner of Income Tax vs Indore Plastics P. Ltd.

Heard Mr. R.L. Jain, the learned counsel for the applicant-department, and Mr. Sanjay Patwa, the learned counsel for the respondent-assessee.

This is an application u/s 256(2) of the Income Tax Act, 1961, as it stood before the amendment of 1999, praying for calling reference from the Income Tax Appellate Tribunal, Indore Bench, Indore, for resolution of the question, as extracted in para. 4 of the application, which is said to be a question of law.

The dispute is regarding payments made to the assessee in instalments, by one Shri R.C. Khosla, in the relevant assessment year, amounting to Rs. 2,31,390. Apparently, Shri Khosla was the promoter and managing director of the respondent-company. According to the assessing authority as also the Commissioner of Income Tax (Appeals), the said payment was in contravention of Section 269SS of the Income Tax Act and the assessee was, therefore, liable to pay penalty. The penalty so imposed was, however, vacated in second appeal by the Tribunal on the finding that the said payment was not by way of deposit or loan, but towards adjustments of the amount drawn by Shri Khosla, from the company''s account. We find ourselves in full agreement with the Tribunal that the aforesaid finding is a finding of fact, and, therefore, does not give rise to any question of law to be answered by this court.

We, therefore, decline the prayer and dismiss the application.