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2002 (8) TMI 75 - HC - Income Tax"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to the deletion of addition of Rs. 3,67,619 out of its interest claim? - 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the deduction of Rs. 1,48,500 to the assessee in respect of payments made to field organisers after the abolition of the sole selling agency?" - Tribunal, in our opinion, having regard to the aforementioned finding committed a serious error in directing payment: to the extent of 50 per cent. of the claim. Once it is held that the arrangement entered into by the assessee with the firms in question was entered into with a view to defeating the policy decision of the Government of India as regards abolition of the sole selling agency, in our considered view, no amount whatsoever could have been allowed. If the arrangements entered into by the assessee with the alleged market supervisors were violative of the statutory provisions and against public policy, the same cannot be encouraged for any purpose whatsoever, far less for evasion of tax. – both questions must be answered in the negative, i.e., in favour of the Revenue and against the assessee.
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