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2017 (9) TMI 251 - HC - Income TaxAllowable business expenditure u/s 37(1) - inland transportation charges and commission to foreign parties - kickback payment or commission payment - business expediency - Reopening of assessment bad in law - Held that:- It is precisely the contentions of assessee that payment of ₹ 1,31,56,323/should be disallowed and added to total income because this is not a legal payment , Assessing Officer's order is legally and factually untenable.The fate of the present appeals would have to abide by order passed in 09.08.2017 (M/s. Ajanta Pharma's Case - 2017 (8) TMI 857 - BOMBAY HIGH COURT) wherein held the sum and substance of the lengthy discussion in the Tribunal's order is that even if what is alleged by the Assessing Officer and relying upon the report is taken as true and correct, still, the participation of the assessee was not established and proved. The assessee was not found to have made any kickbacks or payment of that nature which reached the Iraq Government and through the channels indicated in the Volcker Committee Report. There was no material of this nature in possession of the Assessing Officer against the assessee. It is in these circumstances that the Tribunal concluded, and essentially in the peculiar facts of the case of the assessee, that the assessee has not incurred any expenditure for any purpose which is an offence or which is prohibited by law. The essential ingredients of explanation below Sub-Section 1 of Section 37, therefore, were not attracted to the Assessee's payment - Decided in favour of assessee. Claim in relation to Section 80HHC - Held that:- This issue been answered by applying ratio of the Judgment of the Hon'ble Supreme Court in the Case of Topman Exports V/s. CIT, reported in (2012 (2) TMI 100 - SUPREME COURT OF INDIA).
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