Law:

Section:

Section 256, read with sections 33(1)(b)(B)(i) and 37(i) of the Income-tax Act, 1961 - Reference - Question of fact - Whether Tribunal's decision that tyre-cord can be said to be an automobile ancillary within meaning of item 20 of Fifth Schedule was justified and no referable question of law arose from its order - Held, on facts, yes - Whether no referable question arose from tribunal's order holding that brokerage on sale was admissible where its genuineness was not challenged but only its excessiveness was challenged without any evidence to show that it was paid for any extra commercial consideration - Held, on facts, yes FACTS The Tribunal took the view that tyre-cord manufactured by the assessee could be considered as an 'automobile ancillary', as contemplated in item 20 of the Fifth Schedule to the Act. As regards the deducibility of certain brokerage paid by the assessee, the Tribunal observed that the genuineness of payment of brokerage was not disputed but the revenue had only contended that brokerage was excessive. The Tribunal held that (i) it was for the businessman concerned to run his business as he liked and whether to employ a broker or not so long as the genuineness of the employment of the broker was not in question ; and (ii) that no extra commercial consideration was involved in the employment of brokers by the assessee or in the payment of brokerage to them. On application under section 256(2) for directing the Tribunal to state questions on the aforesaid two matters decided by it : HELD It was not suggested that the Tribunal had come to the conclusion that tyre-cord was included in automobile accessories without evidence or that the conclusion was perverse. In fact, for an earlier assessment year, an application for directing a similar question to be referred to this Court for determination was rejected by the Tribunal. Accordingly, the Tribunal was justified in treating tyre-cord as 'automobile ancillary, and no referable question arose from its order. Similarly, in respect of the questions regarding allowance of brokerage, no referable question arose from the Tribunal's order. CASE REVIEW CIT v. Nirlon Synthetic Fibres & Chemicals…

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