Commissioner Of Income Tax vs. Rajesh Maheshwari

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ITA/168/2010HC Madhya Pradesh06 March 2014Bench: HON'BLE SHRI JUSTICE RAJENDRA MENON2 pages
For Petitioner: Sanjeev Tuli
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that there was no substantial question of law to interfere with the findings of the appellate authorities. The Tribunal noted that the appellate authority, after appreciating the evidence, material on record, communications, and Board of Directors' meeting proceedings, found that the assessee acted on behalf of M/s Vallabh Refractories and Ceramics Products Limited, and the commission pertained to this establishment. The Tribunal found this to be a finding of fact based on due appreciation of evidence, which was concurrent in nature. Therefore, the Tribunal saw no reason to interfere with the concurrent findings of fact that did not give rise to any substantial question of law. Both appeals were rejected.

What were the facts?

The appeals by the Revenue challenge orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT) concerning assessment years 1998-99 and 1999-2000. The dispute centers on commission income received by the respondent assessee. The assessee contended that the commission was earned by M/s Vallabh Refractories and Ceramics Products Limited, for whom the assessee acted as an agent based on a Board resolution. The assessee further stated that this commission was utilized for repaying his loan. The appellate authorities accepted the assessee's contention, leading to the deletion of `42,07,567/- for FY 1999-2000 and `20,43,975/- for FY 1998-99. The Revenue's appeals are filed under Section 260-A of the Income Tax Act.

What were the issues?

1. Whether the Tribunal erred in law by upholding the deletion of commission income amounting to `42,07,567/- for assessment year 1999-2000 and `20,43,975/- for assessment year 1998-99, when the Assessing Officer had found that the commissions were received by the assessee in his individual capacity. Assessee's Contentions: The assessee argued that the commission income was received by M/s Vallabh Refractories and Ceramics Products Limited, and the respondent acted as an agent for this company based on a Board resolution. The commission was accounted for and utilized by the respondent for loan repayment, thus it should not be treated as the assessee's income. Revenue's Contentions: The Revenue contended that the Assessing Officer had recorded a finding that the commissions were received by the assessee in his individual capacity, and the appellate authorities interfered with these additions without justification. The Revenue relied on the Assessing Officer's findings.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

I.T.A. Nos :: 166 /2010 & 168 /2010

Commissioner of Income Tax, Jabalpur Vs. Shri Rajesh Maheshwari 06.03.2014. Shri Sanjay Lal for the appellant (in both cases). As common questions of law and fact are involved in both these appeals, they are being decided by this common order. Respondent submitted his annual return of income tax for the assessment year 1999-2000 so also for the year 1998-1999, and for both these period, certain commission for sale of tea have been received, the respondent assessee submitted that these commissions were received by M/s Vallabh Refractories and Ceramics Products Limited and the respondent acted for the said establishment based on the resolution passed by the Board of Directors and as the commission income was received, accounted for and utilized by the respondent for repayment of his loan, it was stated that this commission amount received cannot be treated as income of the assessee for the relevant period. The Commissioner, Income Tax (Appeals) and the Appellate Tribunal having accepted the contention of the assessee and having permitted deletion of a sum of `42,07,567/- for the financial year 1999-2000 on this count; and, a sum of `20,43,975/- for the financial year 1998-99, both these appeals are filed by the revenue under section 260-A of the Income Tax Act. Shri S.M. Lal, learned counsel for the appellant, took me through the material available on record and tried to emphasize that the assessing officer has recorded a finding that the commissions were received by the assessee in his individual capacity and, therefore, the additions made by the assessing officer were interfered with by the appellate authority without any justification. On the contrary, based on a judgment rendered by the High Court of Gujarat in the case of Jyoti Limited Vs. Commissioner of Income Tax, 321 ITR 135, the appellate authority have held that the assessee acted as an agent for M/s Vallabh Refractories and Ceramics Products Limited on the basis of the authority granted by the Board of the said Company, and as the amount of commission was earned by M/s Vallabh Refractories and Ceramics Products

2 Limited, and was utilized by the respondent for repayment of his loan, the appeal filed by the department has been rejected. We have gone through the findings recorded by the appellate authority and we find that after appreciating the evidence and material available on record, communications and the proceedings of the Board of Directors meeting held, and other documents pertaining to the transactions in question, particularly the records of M/s Vallabh Refractories and Ceramics Products Limited, a finding has been recorded that the assessee respondent acted on behalf of this establishment and it is the commission for the said establishment. That being the position, we see no reason to interfere into the matter as the finding recorded is a finding of fact based on due appreciation of the evidence and material that came on record. The said finding recorded concurrent in nature does not give rise to any substantial question of law, which warrants reconsideration now by us in these proceedings. Accordingly, finding no ground for indulgence, both the appeals are rejected.

(RAJENDRA MENON)

( J.K. JAIN )

J U D G E J U D G E

Aks/-

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