Delhi High Court
Commissioner Of Income-Tax vs Modi Pon Ltd. on 23 July, 1990
Equivalent citations: [1991]192ITR690(DELHI)
Author: B.N. Kirpal
Bench: B.N. Kirpal
JUDGMENT
1. This is a petition in respect of the assessment year 1975-76. The question sought to be referred by the petitioner is as follows :
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in confirming the order of the Commissioner of Income-tax (Appeals) in deleting the disallowance of Rs. 16,48,298 made by the Income-tax Officer under section 40A(2)(a) read with section 40A(2)(b)(ii) of the Income-tax Act, out of the total selling agency commission of Rs. 32,96,597 paid to Messrs. Synfibre Sales Corporation ?"
2. A similar question had been raised and decided by the Tribunal in respect of the assessment year 1969-70 onwards. In the present case, the Tribunal followed its earlier decision for those years and it upheld the order of the Commissioner of Income-tax (Appeals) and allowed the commission. In respect of the earlier years, the Department filed application under section 256(1) which were dismissed and then filed an application under section 256(2) of the Act before the Allahabad High Court. Vide order dated August 23, 1988, the Allahabad High Court, in I.T.A. No. 139 of 1986 (CIT v. Modi Pon Ltd., [1989] 175 ITR 118), in respect of the assessment year 1974-75, declined to call of the question now proposed in this petition.
3. Learned counsel for the petitioner states that there is a distinction in the present case as the question involved related to disallowance of the sole selling agency. It will be seen that the disallowance pertained to the commission paid to Synfibre Sales Corporation. It was commission to the Synfibre Sales Corporation which was under consideration in the earlier years on merely because, n the present year section 40A is mentioned in the proposed question it would not convert a question of fact into a question of law.
4. Therefore, following the decision of the Allahabad High Court, we decline to call for a reference. The petition is, therefore, dismissed.
5. There will be no order as to costs.