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TMI Blog2017 (1) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... tribunal is just and proper. The issues are required to be answered in favour of the department and against the assessee. - D.B. Income Tax Appeal No. 208/2005 - - - Dated:- 23-11-2016 - K. S. Jhaveri And Mahendra Maheshwari, JJ. For the Appellant : T. C. Jain For the Respondent : Anuroop Singhi JUDGMENT K. S. Jhaveri, J. 1. By way of this appeal, the assessee has challenged the judgment and order of the Tribunal whereby Tribunal has dismissed the appeal preferred by the assessee. He has confirmed the order of CIT(A). 2. The facts of the case are that during the year under consideration the assessee had claimed payment of commission to the following persons. S.N. Name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances of the case, the Hon'ble ITAT was legally correct in sustaining order of Id. CIT (A) as regards disallowance of commission on sales? 3. Whether in the facts and circumstances of the case the finding arrived at by Hon'ble ITAT are not sustainable being contrary to evidence on record and based on irrelevant considerations like they first time acted as commission agent and they are not persons who are taxi drivers, travel agents or tourist guide, as commission was payable as per trade practice to anyone who introduces the customer to whom sales are effected? 4. Whether in the facts and circumstances of the case, the findings arrived at by Hon'ble ITAT are perverse and contrary to evidence available on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits thereby. It is enough to show that the money is expended, not of necessity and with a view to direct and immediate benefit, but voluntarily and on grounds of commercial expediency and in order to indirectly to facilitate the carrying on the business. The expression commercial expediency is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as a business expenditure if it was incurred on grounds of commercial expediency. 6.1 In case of Additional Commissioner of Income Tax vs. Rajasthan Spinning and Weaving Mills Ltd. reported in 274 ITR 465, it has been held as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, especially where the undertaking owned by the assessee is one which is to some extent a polluting industry. 6.3 Decision of Rajasthan High Court in Commissioner of Income Tax vs. Rajasthan Spinning and Weaving Mills Ltd. reported in (2006) 281 ITR 408 (Raj.) wherein it has been held as under:- It is well-settled that expression 'wholly and exclusively' does not denote 'necessarily'. The word 'wholly' refers to quantum of expenditure. The word 'exclusively' refers to motive, objective or purpose with which the particular expense has been incurred. Ordinarily, it is for the assessee to decide whether any expenditure should be incurred in the course of its or his business. Such expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplying the law erroneously; or (iii) the Courts have wrongly cast the burden of proof. When we refer to 'decision based on no evidence', it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding. 7.1 He relied upon the decision of the Punjab and Haryana High Court in Commissioner of Income Tax vs. Vikas Chemi Gum India reported in 276 ITR 32 which reads as under:- The requirement of recording of reasons and communication thereof has been read as an integral part of the concept of fair procedure. The necessity of giving reasons flows from the concept of rule of law which constitutes one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion which might prejudice either of the parties before the High Court. We allow the appeals, vacate the orders of the Tribunal as also of the High Court confined to the question of reference and direct the following question to be referred by the Tribunal to the High Court for its opinion: Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditure by way of secret commission was deductible under Section 37(1) of the Act in computing the business income of the assessee? 8. We have heard counsel for the parties. 9. Mr. Singhi has taken us to the cross-examination wherein it has come on record that they were knowing so that they were not introduced and recommended for any com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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