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TMI Blog2014 (11) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... which is paid to certain individuals or agencies, that provide transport business to the respondent. The payment itself is not established and secondly it is not the case of the assessee before the assessing authority that the particulars of the persons to whom secret commission was paid could not be supplied without detriment to the business of the assessee having regard to the nature of the business of transport of cargo carried on by the assessee-company – thus, the deduction cannot be claimed as a matter of course, and it can only be on complying with the two requirements as to the particulars of the amounts paid as commission are furnished transaction-wise and ultimately they are correlated to the turnover and the names of the reci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in Appeal Nos.978 and 979/Hyd/88 for the assessment years 1983-84 and 1984-85 in respect of this very respondent. The appellant filed further appeal before the Tribunal feeling aggrieved by the order of the Commissioner. The appeal, to that extent, was dismissed. Hence, this appeal under Section 260 A of the Act. 3. Sri J.V.Prasad, learned Standing Counsel for the appellant, submits that the very description of the amount claimed as deduction is opposed to law and nowhere in the Act, the secret commission is treated as an allowable deduction. He submits that in respect of the respondent itself, this Court in COMMISSIONER OF INCOME TAX Vs. TRANSPORT CORPORATION OF INDIA LTD 256 ITR 701. held that such commissions are not payable and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1983-84 and 1984-85 by their order, dated 11.05.1990, I direct that this disallowance be restricted to ₹ 50,000/-. 6. Obviously because there was an order of the Tribunal on that very aspect, the Commissioner did not feel it necessary to deal with the matter in detail and accordingly, did not discuss the relevant facts, be it as regards the particulars of payment, or the persons to whom it was paid. In the appeal preferred by the Revenue, the Tribunal dealt with the contentions in detail. While the Revenue pleaded that the claim itself is impermissible in law, the respondent pleaded that there is no prohibition as such. As regards particulars, it is stated that not only the item-wise expenditure, but also the names ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the secret commission as such cannot be paid at all, and if paid, cannot be deducted under Section 37 (1) of the Act. Some cloud on the meaning of the expression secret commission needs to be cleared. At the first blush, it may give an impression that the expenditure was incurred for undertaking some clandestine activities. In fact, it is not so. The secret commission referred to in the orders of assessment or the subsequent judgments, is the amount, which is paid to certain individuals or agencies, that provide transport business to the respondent. Beyond that, it has no taint of illegality or secrecy. 10. The respondent relied upon the judgment of the Bombay High Court in C.I.T. Vs. SIGMA PAINTS LTD 188 ITR 6 (Bombay). In that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of cargo carried on by the assessee-company. Looking from that angle, the above judgment of the Bombay High Court has no bearing to the facts of this case. In the case on hand, the respondent pleaded that it has furnished the particulars of not only the quantum of payment transaction-wise, but also the names of the persons to whom the commission was paid. 13. We have already observed that the Appellate Authority did not deal with that aspect, obviously because it relied upon the order passed by the Tribunal in respect of the very assessee. Now that a view is expressed by this Court that the deduction cannot be claimed as a matter of course, and it can only be on complying with the two requirements, namely (a) the particulars of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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