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TMI Blog2011 (2) TMI 1446X X X X Extracts X X X X X X X X Extracts X X X X ..... s regarding confirmation of disallowance of certain unvouched expenses which could be described as speed money also despite the directions of the Tribunal. 3. The brief facts of the case are that the assessee is engaged in the business of clearing and forwarding of cargo. During the assessment proceedings it was noticed that certain expenses were unvouched and such expenses were further in contravention to Explanation to section 37(1) and therefore the same were disallowed. The matter travelled to the Tribunal and after examining the submissions the same was sent back to the file of the A.O. vide para 6 which is as under: - "6. Heard both the parties and considered their rival contentions. It is seen from the CIT(A)'s order that the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edless to say that the assessee shall be given a fair chance of hearing." 4. In the fresh set aside proceedings it was mostly contended by the assessee that such expenses were incurred on behalf of various clients/ principals and were being reimbursed by such clients/principals and assessee was not claiming these expenses as such. Further the assessee was following a procedure by which a quotation was given to the clients in which it is clearly stated that unforeseen expenses would be charged on actual basis. Reliance was also placed on the decision of the Tribunal in the case A.L.P. (India) P. Ltd. vs. DCIT 96 ITD 227 (Mum). However, the A.O., after examining the submissions, did not find any force because the bills raised by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s copy of the invoice raised by the assessee, that these charges have been shown as services charges towards obtaining an attested freight receipt, conveyance, etc. At this juncture he submitted that he has already discussed the matter with his clients, i.e. assessee and has convinced them to accept 25% of the disallowance in terms of the decision of the Tribunal in the case of A.P.L. (India) P. Ltd. (supra). He submitted that the because even the Revenue authorities have not clearly found that whole of the expenses were paid to the government employees and some of the money might have been paid to the government people and on that basis only estimate can be made. 6. On the other hand, the learned D.R. submitted that the A.O. and CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es - Whether such payment is not an illegal payment or a payment opposed to public policy as dock workers are not Government employees - Held, yes - Whether, however, where assessee failed to establish that actually payment had been made to extent indicted in vouchers, 25 per cent of expenditure incurred by way of payment of speed money was to be disallowed on estimate basis - Held, yes." From the above it is clear that if it can be finally found that money was paid to the government employees only then this would be covered by the Explanation to section 37(1) otherwise the expenditure would be justified. In that case also in the absence of details it was assumed that speed money was paid to the extent of 25% to government employees becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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