Commissioner of Income Tax, Kanpur vs Cement Distributors

R.K. Agrawal, J.—In the present income tax appeal, filed by the Commissioner of income tax, Kanpur, as many as five substantial questions of law have been raised, which are said to be arisen out of the order dated 8-2-1999 passed by the income tax Appellate Tribunal, Allahabad regarding assessment year 1988-89. Heard learned counsel for the parties.

It appears that a sum of Rs. 4,79,612 was shown as the receipt from the commission. The Assessing Officer held that that amount is to be assessed on protective basis at the hands of the assessee whereas the same be assessed on substantive basis in the hands of General Traders & Co. The Tribunal had held that if the commission receipt was taxable in the hands o the assessee then its claim of expenses incurred for earning commission should be considered. The matter was remanded to the Commissioner (Appeals). The question as to whether the assessee actually rendered services to M/s. General Traders & Co. and expenditure claimed against earning of commission income was allowable in the hands of the assessee firm, came up for consideration before this Court in Income Tax Application Nos. 385 and 386 of 1992 relating to the assessment years 1982-83 and 1983-84. This Court vide order dated 30-3-1995 rejected the reference applications u/s 256(2) of the income tax Act, 1961 as it was of the opinion that no question of law arose out of the order of the Tribunal. That being the position, the matter stands settled that the expenditure for earning the commission was allowable in the hands of the assessee firm. In this view of the matter in our considered opinion, the order of the Tribunal does not give rise not rise to any substantially question of law. The appeal fails and is hereby dismissed.