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TMI Blog2009 (6) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ. Mr. K. Subramanyam, for the Appellant. Mr. R. Venkata Narayanan for M/s. Subbaraya Aiyar, for the Respondent. JUDGMENT The Judgment of the court was delivered by F. M. IBRAHIM KALIFULLA, J. - The Revenue has come forward with this appeal on the following substantial questions of law.:- (1) Whether in the facts and circumstances of the case, the Tribunal was right in deleting the addition made on account of payments to third parties contrary to the terms of agreement with the agent? (2) Whether in the facts and circumstances of the case, payments made to third parties at the request of the agent, without any evidence of service having been rendered by the third parties can be treated as a business expenditure? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT appeals, the Chartered Accounts of the assessee placed various materials in support of its claim and the CIT appeals has rendered the finding as under:- "......... The Chartered Accountant has also furnished before me the full particulars of this additional commission indicating the Invoice No. and date, the particular item of the machinery sold such as cone winder, double winder, ring spinning frame, ring doubling frame etc., along with the name of the customer, the amount of commission in each case, the cheque No. and date of payment of each such amount. I find no justification for the disallowance of the claim. The addition of Rs.9,13,247/- is accordingly deleted. " 3. The Tribunal was pleased to confirm the order of CIT ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the decision of our High Court in the case of [2008] 305 ITR 438 CIT v. SAPTHAGIRI TRADERS LTD., wherein it is held that in order to claim a deduction under Section 37 of the Income Tax Act, two conditions must be satisfied (a) the expenditure should have incurred wholly and exclusively for the purpose of business and (b) such expenditure should not be in the nature of capital expenditure. After setting out the said legal principle, the Division Bench on being satisfied with the findings of the Tribunal held that it cannot be doubted and the same cannot be interfered with. When the above principle will apply to the facts of the present case, we too find that the assessee satisfactorily established before the CIT appeals that the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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