TMI Blog1972 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... s right in holding that the sum of Rs. 1,56,806 was wholly and exclusively laid out for the purpose of business and as such allowable as a business expenditure?" The High Court has answered that question in the negative and in favour of the revenue. The correctness of the decision of the High Court is challenged before us by the assessee. The question referred to the High Court for its opinion proceeds on the basis that the facts and circumstances of the case as found by the Tribunal are not in dispute but what is disputed is the legal effect of the facts and circumstances found by the Tribunal. As held by this court in the earlier decisions that when a question refers to the facts and circumstances in the case, it means the facts and circumstances as found by the Tribunal. If any party wants to challenge the correctness of the findings given by the Tribunal either on the ground that the same is not supported by any evidence on record or is based on irrelevant or inadmissible evidence or is unreasonable or perverse, a question raising any one of those grounds must be sought for and obtained. It is needless to say that the jurisdiction of the High Court in a reference under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responsible for the due fulfilment of all contracts made by them whether for ready or forward sales and also for the consequences of any breach of contract by any customer and for all losses and damages arising therefrom to the principal provided there shall be no default on the part of the principal when manufacturing or giving delivery of any goods required or sold under any contract in compliance with the stipulations thereof. 14. That the parties may by mutual consent agree to continue after the expiry of the 31st day of March, 1955, on the same terms and conditions as are herein contained or any modification thereof as they may decide in which case the agency business shall be terminated by either party giving to the other not less than three months' notice in writing sent by registered post and such notice shall be deemed to have been given seven days after the same has been posted. 15. Notwithstanding anything contained in any of the foregoing clauses if the agents shall fail to make any payments as herein provided or commit any breach of any covenant herein contained and on the part of the agents to be observed and performed the principal shall have right at any time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission paid was that during the accounting year all the sales were effected directly by the assessee and no sales were effected by the selling agents. But those authorities failed to take note of the fact that apart from the fact that the selling agents were entitled to discount even in respect of the sales directly made by the assessee, the agents were responsible for the payment of the price due from the purchasers immediately after the goods left the principal's works or godown. Such payment had to be made on presentation of necessary papers or documents by the assessee, not later than a fortnight after the date the goods were despatched. In default of payment as aforesaid, the assessee was entitled to charge interest until realisation at the rate of six per cent. per annum on the balance for the time being outstanding. Under clause (9) of the agreement, the agents were also responsible for due fulfilment of all contracts made by them whether for ready or forward sales and also for the consequences of any breach of contract by any customer and for all losses and damages arising therefrom to the assessee provided there was no default on the part of the assessee in manufacturin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax v. Walchand Co. Private Ltd. in applying the test of commercial expediency for determining whether an 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. In J. K. Woollen Manufacturers v. Commissioner of Income-tax, after applying the rule laid down in Walchand Co.'s case that in applying the test of commercial expediency for determining whether an 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 income-tax department, this court proceeded to observe: " It is, of course, open to the Appellate Tribunal to come to a conclusion either that the alleged payment is not real or that it is not incurred by the assessee in the character of a trader or it is not laid out wholly and exclusively for the purposes of the business of the assessee and to disallow it." In the instant case, it is not the case of the revenue that the assessee did not pay the commission in question nor is it its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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