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TMI Blog1965 (12) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 20,199 as expenditure incurred by way of payment of brokerage. The claim for deduction was disallowed by the assessing authority, but allowed in part on appeal. The Appellate Assistant Commissioner considered that the brokerage claimed as having been paid worked out at 40 percent of the profit, and as, in his view, this was excessive, he fixed a remuneration of ₹ 300 per month to each of the four agents and disallowed the excess. The assessee took the matter on further appeal to the Tribunal but unsuccessfully. In the circumstances, the following question has been referred to us under S. 66(2) of the Income-tax Act, 1922: Whether on the facts and in the circumstances of this case, the disallowance of ₹ 5799 being par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue under S. 10(2)(xv) is confined to deciding the reality of the expenditure, namely, whether the amount claimed for deduction was factually expended or laid out, and whether it was wholly and exclusively for the purpose of the business. Once that conclusion is reached in favour of the assessee, deduction of the amount should follow as a matter of course. (2) This Court in Newton Studios Ltd. v. Commissioner of Income-tax, Madras, observed with reference to S. 10(2)(xv): The Income-tax Act does not clothe the taxing authority with any power or jurisdiction to determine the reasonableness of the amount so fixed and paid by the assessee. The only test for the deductibility of such remuneration is whether the expenditure has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agencies for canvassing purchasers of certain articles, and the rest as agency for packing and the agency for delivery. The terms of agreement between the assessee and the agents are that the firm was to provide them with work and payment of remuneration was to be at the rate of one anna six pies per article sold in the firm. Neither the tribunal nor the Appellate Assistant Commissioner recorded a finding that the remuneration as stipulated in the agreement was not paid or that the payment was not incurred exclusively and wholly for the purpose of the business. The disallowance in part by the Appellate Assistant Commissioner was on the basis that in his view the payment of forty per cent of the profits as commission was rather excessive. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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