Suhas Chandra Sen, J.
1. There are some extraordinary features in this case. Indian Press Exchange Limited is one of the Birla Group of companies. Sri A. L. Goenka was an influential officer of this group and at one point of time was the chief executive of the Indian Press Exchange Limited. The company paid large sums to the two minor sons of Sri A.L. Goenka allegedly by way of commission. The company in its assessment claimed the payment as expenditure wholly and exclusively laid out for business. The ITO assessing the company disallowed the expenditure on the ground that the payments were made for extra-commercial considerations. The finding of the ITO was ultimately sustained by the Tribunal. On a reference, the High Court declined to interfere with the finding of the Tribunal.
2. The income-tax assessment of Sri A. L. Goenka for the assessment year 1969-70 was completed on February 7, 1970, on a total income of Rs. 71,395. A notice was issued on March 28, 1974, under Section 148 of the I.T. Act seeking to reopen the assessment of Sri A. L. Goenka for the assessment year 1969-70 on the basis of the information received from the ITO who had passed the assessment orders in the case of Indian Press Exchange Limited. The jurisdiction to issue that notice was challenged in this court. The allegation was that the payments that were shown by the company to have been made to the two minor sons of Sri A. L. Goenka by way of commission were really payments to Sri A. L. Goenka.
3. The assessee filed a writ petition in this court and contended that there was no material for entertaining the belief that the income that was received by the two minor sons was really the benami income of Sri A. L. Goenka. Mukherji J. upheld the contention of the assessee and quashed the notice under Section 148.
4. It has been contended on behalf of the Revenue that there was no reason for the company to pay large sums of money to the two minor sons of an influential member of the Birla Group of companies. The finding of fact is that the payment was for extra-commercial considerations. The ITO in charge of Sri A.L. Goenka's case had reason to believe that the income which was shown as the income of the two minor sons was really the income of Sri A. L. Goenka.
5. It is true that the finding of fact is that the company paid the amount to the two minor sons for reasons that have not been disclosed. A company trading normally for profit does not give its money away by way of commission to any person who has not rendered any service to the company. The payment made by the company was not in the course of its own trade but out of that course. In the language of Ungoed-Thomas J. in the case of Petrolim Securities Ltd. v. Ayres  41 TC 389, 400 (Ch D). 'These transactions, when seen in the context of the company's trading operations, cry aloud for an explanation. '
6. In the assessment of the company, the explanation that was given was disbelieved and the claim for deduction of the amount as having been spent wholly and exclusively for the purpose of business was disallowed. But no other material has come to light to explain this un-commercial bounty.
7. The question that is now being raised before us is whether there is any material to believe that the amounts that were shown to have been paid to the two minor sons of Sri A. L. Goenka were, in fact, paid to Sri A. L. Goenka and the income was liable to be assessed as benami income of Sri A.L. Goenka. The law is well settled that if there is any material to believe that the income was the benami income of the assessee, the court cannot interfere in the matter. But it must be established to the satisfaction of the court that there was some material in the possession of the ITO from which it was possible to infer that the amounts shown to have been received by the two sons were really the income of Sri A. L. Goenka. The court cannot go into the question whether the material was sufficient or not. But the court has to examine whether there is any nexus between the material and the belief that is alleged to have been formed by the ITO at the time of issuing of the notice under Section 148. The materials that have been collected in this case are :
1. The sons had received the amounts in question.
2. The sons were paid by the Indian Press Exchange Ltd.
3. The payments were made out of extra-commercial considerations.
4. The assessee, A. L. Goenka, used to be the chief executive and a very influential person in the company.
8. The materials that have been brought on record cannot be the reasons for believing that the payments received by the two sons were benami income of Sri A. L. Goenka. It may be that the two minor sons received un-commercial bounty from the company because of the position and influence of Sri A. L. Goenka in the company. The company's claim for deduction as business expenditure of the payments made to the two sons may have been disallowed in the assessment of the company for good reasons. But that cannot by itself be the basis for believing that it was Sri A. L. Goenka who was the real recipient of the amounts. In the judgment under appeal, it was held that if relatives of influential persons were paid salaries and commission by companies because of the power and influence of those influential persons, it did not follow that the payments were really made to those influential persons and not to the relatives. We are in agreement with this view. In our opinion, there is no material for the formation of the requisite belief for issuing the impugned notice under Section 148.
9. The appeal is dismissed.
10. There will be no order as to costs.
Satish Chandra, C.J.
11. I agree.