Commission of inquiry expenses treated as allowable revenue expenditure for tax purposes under established assessee-specific reasoning.

Commission of inquiry expenses incurred in the relevant assessment year were examined for deductibility as revenue expenditure. The Tribunal had treated the outlay as outside normal business hazard and not wholly and exclusively for business purposes, but the High Court applied its earlier decisions involving the same assessee and followed the same reasoning. The expenditure was held to be allowable as revenue expenditure, and the reference was answered in favour of the assessee.

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Issues: Whether commission of inquiry expenses incurred in the relevant assessment year were allowable as revenue expenditure.

Analysis: The reference arose under Section 256(1) of the Income-tax Act, 1961. The expenditure was incurred in connection with a commission of inquiry concerning the assessee group, and the Tribunal had treated it as not being a normal business hazard and not laid out wholly and exclusively for business purposes. The Court followed its earlier decisions involving the same assessee and applied the same reasoning to the present reference.

Conclusion: The expenditure was held to be allowable revenue expenditure, and the question was answered in the negative in favour of the assessee.

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