TMI Blog1967 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ging agents for nine public limited companies. The business of the assessee was managed by three directors. Each director was paid a remuneration of Rs. 2,500 per month. The assessee had employed three executive officers to administer its affairs. By resolution dated July 9, 1952, the remuneration of each of the directors of the assessee was increased with retrospective effect from April 1, 1952, by Rs. 1,000 per month and of two out of the three officers by Rs. 500 per month and of the remaining officer by Rs. 750 per month. In the year 1953, the remuneration of each of the directors was increased by Rs. 500 per month and of each of the officers by Rs. 250 per month. In proceedings for assessment of income for the years 1953-54 and 1954 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch case be allowed as a revenue deduction". In making this order the Tribunal apparently lost sight of the fact that in the account year 1952-53 the directors received Rs. 42,000 as remuneration for the whole year, and it was only in the year 1953-54 that the directors received Rs. 48,000 as remuneration. The Tribunal also directed that in regard to each employee increase in salary not exceeding Rs. 3,000 per annum as compared to the preceding year's assessment be allowed as a permissible deduction. The Tribunal gave no reasons for disallowing the balance of the salary paid to the three officers. The Tribunal submitted the following question for determination of the High Court of Bombay : "Whether, on the facts and in the circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that, though the Tribunal is not a court, it is invested with judicial power to be exercised in manner similar to the exercise of power of an appellate court acting under the Code of Civil Procedure. Authority to "pass such orders thereon as it thinks fit" in section 33(4) of the Income-tax Act, 1922, is not arbitrary: the expression is intended to define the jurisdiction of the Tribunal to deal with and determine questions which arise out of the subject-matter of the appeal in the light of the evidence, and consistently with the justice of the case. In the hierarchy of authorities the Appellate Tribunal is the final fact-finding body : its decisions on questions of fact are not liable to be questioned before the High Court. The nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of commercial expediency. In applying the test of commercial expediency for determining whether the expenditure was wholly and exclusively laid out for the purpose of the business, reasonableness of the expenditure has to be adjudged from the point of view of the businessman and not of the revenue. The Income-tax Officer was of the view that there was no adequate increase in the earnings of the assessee, for the increase in remuneration was not reflected in the increase in profits of the assessee and that it appeared that, as compared to the previous years, the business profits disclosed by the assessee had fallen by Rs. 2 lakhs and, therefore, the increase in expenditure could not be justified as laid out wholly and necessarily for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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