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2014 (11) TMI 507 - HC - Income TaxSecret commission to promote business disallowed u/s 37(1) – Genuineness and quantum of deductions - Held that:- It is difficult to discern from it that a principle was laid to the effect that the secret commission as such cannot be paid at all, and if paid, cannot be deducted u/s 37 (1) of the Act - Some cloud on the meaning of the expression secret commission needs to be cleared - it may give an impression that the expenditure was incurred for undertaking some clandestine activities - The secret commission referred to in the orders of assessment or the subsequent judgments, is the amount, which is paid to certain individuals or agencies, that provide transport business to the respondent. The payment itself is not established and secondly it is not the case of the assessee before the assessing authority that the particulars of the persons to whom secret commission was paid could not be supplied without detriment to the business of the assessee having regard to the nature of the business of transport of cargo carried on by the assessee-company – thus, the deduction cannot be claimed as a matter of course, and it can only be on complying with the two requirements as to the particulars of the amounts paid as commission are furnished transaction-wise and ultimately they are correlated to the turnover and the names of the recipients are (i) furnished in the returns or (ii) a plea is raised to the satisfaction of the Assessing Authority that the disclosure of the names of the recipients is detrimental to the interest of the assessee - Those two important factors have not been addressed by the Appellate Authority – thus, the matter is to be remitted back for fresh consideration – Decided in favour of revenue.
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