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2014 (1) TMI 1086 - HC - Income TaxExpenditure on secret commission and specimen distribution - Held that:- Decision in CIT v. Taraporvala Sons Co. (P) Ltd. [1999 (3) TMI 54 - BOMBAY High Court] followed - In view of the amendment to s.37(1) of the Act by the insertion of Explanation with retrospective effect from the inception of the Act, i.e. 1st April 1962, the matter requires consideration by the Tribunal - Any secret transaction/payment that is made to secure an unfair advantage, would necessarily be repugnant to law - Transaction which is not transparent, offends normal business practice, must suffer scrutiny - The expenditure incurred on secret commissions would necessarily fall within the mischief of the explanation added to Section 37 of the Act. The Tribunal has decided the matter in a sweeping and general manner - The impugned order neither discusses the evidence nor takes into account any other facts and attending circumstances but there is only sweeping reference to its earlier judgments - When neither the incurring of expenditure as a fact under the two given heads has been properly accounted for nor application, in their relation and impact of Explanation added to Section 37 of the Act has been taken into consideration, the impugned order is legally vitiated - The issue has been set aside for fresh adjudication.
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