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Issues involved:
1. Payment of commission to several parties without consideration for services rendered. 2. Disallowance of expenditure under section 14A of the Income-tax Act, 1961. Issue 1 - Payment of Commission: The High Court considered the appeal regarding the payment of &8377; 32 lakhs as commission by the assessee to various parties. The Tribunal's detailed findings confirmed the genuineness of the payments, stating that there was no evidence of the commission being an accommodation entry or a paper transaction. The Tribunal also noted that the departmental authorities did not conduct any inquiry to prove the transactions as non-genuine. The ITAT expressed satisfaction with the genuineness of the transactions, considering the past payment of commissions and the negligible commission percentage. The High Court upheld the ITAT's decision, emphasizing that it would intervene only if a finding appeared to be perverse, which was not the case here. Issue 2 - Disallowance under Section 14A: The second question pertained to the disallowance of &8377; 2 lakhs under section 14A of the Income-tax Act, 1961. The ITAT correctly noted that expenditure cannot be disallowed based on a mere estimate of what could have been incurred to earn exempted income. The Tribunal found no evidence to support that the expenditure was incurred to earn exempted income, thus ruling out the need for disallowance. In conclusion, the High Court found no substantial questions of law to consider and dismissed the appeal.
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