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1960 (12) TMI 11 - SUPREME COURTWhether in the computation of taxable income for purposes of income-tax and excess profits tax, commission allowed to Mahadevan at 12 1/2% should be allowed after deducting the excess profits tax paid? Held that:- There was thus ample evidence in support of the conclusion of the Excess Profits Tax Officer which was confirmed by the Tribunal. The High Court was not justified in seeking to reappreciate the evidence on which the conclusion of the Excess Profits Tax Officer, which was confirmed by the Tribunal was based. Their jurisdiction being advisory, the High Court had to answer the questions submitted for opinion on the facts found ; if the High Court held the view that the taxing authorities had misdirected themselves in law or had made a wrong inference in law or had failed to apply the correct tests or had misconceived the evidence, it was open to them to invite the attention of the taxing authorities to the error committed by them ; but the High Court could not set aside the decision of the taxing authorities on a reappreciation of the evidence. We may also point out that even if the High Court concluded that the total disallowance of the deduction claimed was not justified, the High Court could not substitute its own view as to what was reasonable and necessary. The High Court had, if it disagreed with the taxing authorities, still to answer the questions submitted and leave to the consideration of the Excess Profits Tax Officer what in the circumstances was reasonable and necessary. The answer to the question whether the disallowance by the excess profits tax authorities of the commission paid to branch managers was justified under rule 12, Schedule I of the Excess Profits Tax Act should have been answered in the affirmative. Appeal allowed.
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