Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - General - Assessment year 1960-61 - Assessee-company arranged for purchase of machinery required by another company from a Canadian company - In assessment proceeding assessee-company claimed that during negotiation of purchase certain sum was advanced to it by said Canadian company - However ITO found that said loan was not repaid for a long time and no security was provided for that, further, there was no specification with respect to original invoices and vouchers of machine purchased - He therefore treated said loan as "bogus" and treated that as commission received by assessee from Canadian company - Whether in view of above there could be little doubt that features, such as those to which ITO referred, could not be characterised as irrelevant or extraneous to formation of belief which is enjoined by section 147(a) - Held, yes Section 147, read with section 297, of the Income-tax Act, 1961 - Income escaping assessment - General - Assessment year 1960-61 - ITO reopened assessment of assessee-company and initiated proceedings under section 148 - Assessee contended that provision of Act was not applicable to relevant assessment year - Whether since no proceedings under section 34 of Act of 1922 had been commenced or was pending in respect to assessee when Act commenced to operate, in view of section 147(a) read with section 297(2)(d)(ii), provisions of Act were applicable to instant case - Held, yes FACTS The assessee was a private company which engaged itself in the activity of promoting the formation of a public company. In that context it arranged for the purchase of machinery required for the public company from a company in Canada. In the assessment proceedings, the assessee-company stated that during the negotiations for that purchase, certain amount was advanced by the Canada company to the assessee-company to purchase shares of that value in the paper mills. However the ITO reopened assessment of assessee on ground that what was described as a loan by the assessee-company was in truth commission paid by the Canada company for having arranged the purchase of the machinery by the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492