Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 975 - HC - Income TaxCommercial expediency - whether the amount paid by the assessee in terms of the decree passed by the Bombay High Court falls within the words 'commercial expediency' and therefore entitled to deduction? - Held that:- The amount paid by the company in terms of a decree passed by the High Court cannot be construed as either prohibited by law or is an offence. Even if the assessee was in no way benefited by the said transaction and even if the Managing Director without the authority has bound the assessee and when once a decree is passed by a competent Court, there is a threat to the business of the company. If the decretal amount is not paid, the decree holder could have executed the decree against the property of the company; could have attached the property of the company and the creditors in the alternative also could have filed for winding up of the company. In those circumstances, to avoid such legal complications, if the decretal amount is paid, it cannot be construed that there was no 'commercial expediency' in payment of such amount. All the appellate authorities on careful consideration of the entire material on record has rightly held that the said expenditure falls within Section 37 of the Act and rightly directed the assessing authority to delete the said amount. - Decided in favour of the assessee
|