J.J. Zand - Page 96

                                        - 178 -                                       

          Diesel Power appears to have had little or no involvement in the            
          Pakistani sale and, therefore, did not earn the commissions in              
          relation to it.  Petitioner, on the other hand, earned all of the           
          GM commissions attributed to Diesel Power on the CTC receipts               
          journal.  Petitioner appears to have negotiated the Pakistani               
          locomotive sale and he was in control of the arrangement.  A                
          letter from petitioner to Mr. Khilnani indicates that petitioner            
          was willing to pay for Mr. Khilnani's travel expenses, which he             
          apparently was not required to do.  Diesel Power does not appear            
          to have had any involvement in these arrangements.  There is also           
          testimony that Diesel Power never sold anything that was not                
          shipped to Iran.  There is persuasive evidence that petitioner              
          was responsible for and controlled the Pakistani arrangement.               
          Therefore, we conclude that petitioner earned the commissions               
          paid in connection therewith.                                               
               For the same reason, we conclude that respondent's                     
          allocation in the notice of deficiency for 1976 of "other" income           
          in the amount of $34,377.70, which is equivalent to payments to             
          Mr. Khilnani, also was correct.  However, the payments made to              
          Mr. Khilnani and the Amelia Corporation, to the extent proven,              
          would also constitute deductible commission expenses.  All                  
          payments to Amelia Corporation but one were sufficiently proven             
          and constitute deductible expenses.  With respect to this one               
          payment, petitioner stated that $50,000 was paid in 1976 to                 





Page:  Previous  168  169  170  171  172  173  174  175  176  177  178  179  180  181  182  183  184  185  186  187  Next

Last modified: May 25, 2011