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TMI Blog2019 (2) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. The challenge pertains to the addition of Rs. 23,19,547/- by the Assessing Officer (A.O.) at Annexure A, on the ground that the said payment is not related to the business of the assessee, which on challenge, before the Commissioner of Income Tax (Appeals) was sustained vide Annexure B. The Tribunal too dismissed the appeal concurring with the finding of the A.O. and CIT (Appeals). 3. The question of law that arises for consideration, as re-framed by us, are thus: i) Whether the Tribunal was justified in coming to the conclusion that the expenditure claimed by the appellant is not by way of commercial expediency ? ii) Whether the Tribunal was justified in disallowing the expenditure claimed by the assessee on the ground that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. 7. In appeal before the Tribunal, it was attempted to be impressed upon by the assessee that the claim was genuine and properly accounted for. The argument raised by the Revenue was that the expenditure does not pertain to the assessee and was not its liability. The assessee therefore, could not claim that amount as expenditure. It is pointed out that as per Annexure D agreement, which is between the supplier M/s Cargill India Pvt.Ltd. and PEIPL, there was a penal clause at 3.9.3, 3.9.4 and 3.9.5 pertaining to warehousing charges, etc. The fact that the assessee also lifted some amount of goods supplied and that PEIPL had passed on the debit note to the assessee is not a reason for them to honour the debit note and claim that amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee-company to spend the amount in question, the expenditure cannot be treated as one allowable on the basis of commercial expediency. We are of the view that the argument in the light of the principles emerging from the decisions of the Supreme Courts liable to be rejected. As already noted, a sum of money expended not of necessity and with a view to an immediate benefit to the trade but voluntarily and on the grounds of commercial expediency and not incurred for fostering business of another or with some improper or oblique purposes, will be treated as money expended wholly and exclusively for the purpose of the trade. It appears to us that the facts found by the Tribunal bring the payment in question within the description mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Viscount Cave L.C. in Atherton v. British Insulated & Helsby Cables Ltd. [1925] 10 Tax Cas 155 (HL), has stated thus (at page 191): "It was made clear in the above cited cases of Usher's Witshire Brewery v. Bruce [194] 6 Tax Cas 399 and Smith v. Incorporated Council of Law Reporting [1914] 6 Tax Cas 477 that a sum of money expended, not of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the ground of commercial expediency, and in order indirectly to facilitate the 'carrying on of the business, may yet be expended wholly and exclusively for the purposes of the trade; ....." This observation has been noted with approval by the Supreme Court and, therefore, the said observation is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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