LexM/S. BASTI SUGAR MILLS CO. LTD. AND ORS. versus COMMISSIONER OF INCOME TAX, DELHI & RAJASTHAN
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~· 887 A M/S. BASTI SUGAR MILLS CO. LTD. AND ORS. B c D E F G H ~ l COMMISSIONER OF INCOME· TAX, DELffi & RAJASTllAN 1 September 24, 1971 [C. A. VAIDIALINGAM AND P. JAGANMOHAN REDDY, JJ.] Income-tax Act, 1922, s. 6~Reference to High Court-Tribunal's ffndings of fact whether arrived at without consideration of materiafs on record-Tribunal need not refer In its order to insignificant evidence. The three appellant companies were controlled by 0. Another com- pany which was the selling . agent of the three appellant companies was also controlled by G. The question in Income-tax proceeding!I was whether the commission paid to the selling agent was a deductible item. In me origm•l assessments tor 1947-48 in the-cases of the three appellants the Income-tax Officer allowed the deduction but later he issued notices under s. 34 of the Income-tax Act, 1922 on the footing that in the cir- cumstances of the case the commission was not allowable since the selling agent rendered no service whatsoever so as to earn any commission. In making the assessment under s. 34 it was so held by him. In the appeals filed by the Appellant companies, the Appellate Assistant Commissioner gave some relief by allowing deduction in respect of sums paid directly as commission to some sub-agents, but on the main question relating to the amounts paid to the selling agent he agreed with the Income-tax Officer. The contention that action could not be taken under s. 34(1) (c) was also rejected. The Appellate Tribunal took the same view. The appel- lants then asked the Tribunal to refer four questions to the High Court under s. 66( 1) of the Act. The Tribunal rejected the applications. The High Court under s. 66(2) directs the Tribunal to refer the fourth ques· tion relating to the applicability of s. 34 but held the other three questions to be quesetion t>f fact. In appeal before this Court against the order of the High Court it was contended that the Tribunal had erred in not tak- ing into account the evidence of two witnesses produced by the appellants, as also two receipts showing payments made to some sub-agents by the selling agent. The High Court's view that it is not every piece of evidence available on record that must be dealt with by the Tribunal. was questioned. illlLD : The criticism that the evidence of the two witnesses produc- oo by the appellants was not considered as such by the Tribunal was only technically correct. The Tribunal had not referred to witness R by name but had referred to the relationship between the selling agent and the firm of which R was a proprietor, as well as to the effect of a telegram which was claimed to show privily of contract between the selling agent and R's firm. 'Therefore it could not be said that the Tribunal had not considered R's evidence. As to the other wltness S, his evidence had only to be read to be rejected; the Tribunal had moreover given reasons for not acting on his evidence. The two receipts relied on by the appellants lost all significance after the rejection of the evidence of the two afore- said witnesses. Obviously in view of the other evidence against the appclldllts the Tribunal did not think it worthwhile to refer to the two receipts. [893 H; 894 E; 895 CJ 1t must accordingly be held that the finding of Tribunal was based on matenal on the record and that the finding was such which could on the SUPREME COURT REPORTS [l 972] l $.C.R. evidence be reasonably reached. The High Court was hence justified in holding that the first three questions were questions of fact and in de- clining to give a direction to the Tribunal to refer those questions. [895 G] Udhavdas Kewalram v. C.I.T., Bombay City, [1967] 66 I.T.R. 462, referred to. A CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1364 B to 1373 of 1967. Appeals by special leave from the judgment and order dated March 14, 1967 of the Delhi High Court in Income-tax Cases Nos. 25-D of 1965 etc. V. S. Desai, A. K. Verma and B. D. Shingari, for the appel- lants (in all the appeals). R. H. Dhebar, B. B. Ahuja and R. N. Sachthey, for the res-· pondent (in all the appeals). The Judgment of the Court was delivered by c Vaiclialingam, J. These ten appeals, by special leave, are directed againsrt the common judgment and order dated March 14, D 1967 of the Delhi High Court declining to direct the Income-tax Appellate Tribunal, Delhi Bench, to refer along with the
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