1996 (10) TMI 125 - AT - Income Tax

Summary

Issues:
1. Disallowance of 50% of expenses claimed under 'Kuri incentive'.
2. Confirmation of disallowance claimed under 'Kuri canvassing commission'.

Analysis:
1. The appellant appealed against the CIT(A)'s order disallowing Kuri incentive commission, with the AO disallowing varying amounts for different assessment years. The incentive commission was paid to shareholders and directors for collecting instalments. The AO disallowed the claim as no fresh efforts were made for collection. The CIT(A) allowed 50% of the claim, considering some efforts made by shareholders. The Tribunal directed the AO to grant 50% of the claim for all years except 1991-92, where the entire claim was disallowed due to losses incurred.

2. Regarding Kuri canvassing commission, the AO found the claim excessive and not properly vouched. The CIT(A) upheld the disallowances made by the AO for different assessment years. The Tribunal reviewed previous orders and restricted the claim to 50% for all assessment years, considering excessive payments and continuous losses suffered by the company.

3. The Tribunal allowed the Kuri bonus claim for the year 1991-92, disagreeing with the CIT(A) and considering it a business expenditure under section 37 of the IT Act. The appellant partly succeeded in the appeals, with relief granted for Kuri bonus but restricted claims for Kuri incentive and canvassing commission to 50% for all relevant assessment years.