9911796707
|
Home
Issues involved:
The issue involves the deductibility of an amount paid by the assessee-company to an employee as commission for sales and other expenses incurred in the course of business. Summary: The High Court of Bombay considered a case where the assessee-company paid Rs. 26,288 to an employee, Shri Khopkar, as commission on sales and other expenses related to business activities. The company claimed this amount as a deduction in determining its profits for the year 1959-60. However, the Income-tax Officer disallowed the deduction, suspecting that the payment was made to reduce the company's profits and evade tax liability. The Appellate Assistant Commissioner and the Tribunal upheld the disallowance, stating that the expenditure had not been proved to be wholly and exclusively for business purposes. The Court observed that the company failed to prove that the expenditure was genuinely incurred for business reasons, as there was no evidence of the expenses being actually made. Despite arguments by the company's counsel, the Court held that the burden of proof had not been discharged by the company, leading to the disallowance of the deduction. The Court concluded that the claim for deduction was rightly disallowed, ruling against the assessee. In conclusion, the Court answered the referred question in the negative, holding the assessee liable to pay the costs of the reference to the department.
|
