Deductibility of field organisers' payments turned on proof of actual services and supporting evidence.

Deductibility of payments to field organisers depended on proof that actual services were rendered, and the record disclosed no positive material establishing that fact. The tax authority treated the arrangement as a facade after abolition of the sole selling agency, while the appellate authorities had not adequately examined the supporting evidence said to exist. Because the factual record required closer scrutiny and could be clarified by the Tribunal, the issue was considered suitable for reference for decision by the court.

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Issues: Whether, on the facts and circumstances of the case, there was material on record to hold that the payment of Rs. 1,83,000 to the field organisers was made for services rendered and was eligible for deduction as genuine business expenditure.

Analysis: The Court found no positive material showing that the field organisers had actually rendered services. The Income-tax Officer had treated the arrangement as a mask or facade to overcome the abolition of the sole selling agency, while the appellate authorities had proceeded without adequately examining the supporting material said to exist. As the factual record required closer scrutiny and could be clarified by the Tribunal, the issue was considered fit for reference.

Conclusion: The question was directed to be referred for decision of the court.

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