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TMI Blog2003 (3) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... artnership firm carrying on the business of manufacture of Hosiery cloths and articles. In respect of the assessment year 1990-91, it paid Rs. 32254 to its workers as ex gratia payment and claimed it as a deduction. The Assessing Officer, while completing the assessment, called upon the assessee to explain the basis of calculation of the amount. In its reply, the assessee submitted that the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not fall to be allowed under section 37(1) of the Act. He also noted that the employees had actually resigned from the services and have been re-employed in other business concern under the same management. Accordingly, he disallowed the claim. The CIT(A) upheld the disallowance made by the Assessing Officer. 2. The assessee is in further appeal to the Tribunal. After hearing the rival contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of commercial expediency. Necessity to make the payment need not be shown. Section 37(1) as it was originally introduced contained the words "necessarily" but the Select Committee recommended the deletion of the same and in the final section as it was passed that word does find place (sic). This has been noticed by the Supreme Court in the case of Sassoon J. David & Co. (P.) Ltd. v. CIT [1979] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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