Concurrent factual findings on business expenditure and export commission barred interference absent perversity in section 260A review.

Concurrent factual findings that commission was genuinely paid for promotion of export sales and was directly linked to business activity supported allowance as revenue expenditure under section 37(1), and no substantial question of law arose because the findings were not shown to be perverse. Payment to a foreign agent was treated as covered against the Revenue by binding precedent, so the alleged characterisation as fees for technical services under section 9(1)(vii) and the related disallowance under section 40(a)(i) did not survive. The article emphasises that, in section 260A appeals, concurrent findings on genuineness and business purpose will not be interfered with absent perversity.

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Issues: (i) Whether the commission payment of Rs. 1.13 crores was allowable as business expenditure under section 37(1) of the Income-tax Act, 1961, and whether its disallowance could be sustained. (ii) Whether the payment to the foreign agent constituted fees for technical services under section 9(1)(vii) of the Income-tax Act, 1961, attracting disallowance under section 40(a)(i) for failure to deduct tax at source.

Issue (i): Whether the commission payment of Rs. 1.13 crores was allowable as business expenditure under section 37(1) of the Income-tax Act, 1961, and whether its disallowance could be sustained.

Analysis: The factual authorities found that the commission had been paid since 2002 for promotion of export sales, that the recipient and the bank account details established receipt of the amount by the same person, and that the payment had a direct link with export sales. These findings supported the view that the expenditure was genuinely incurred for business purposes. The finding was concurrent, based on facts, and was not shown to be perverse or arbitrary, leaving no substantial question of law.

Conclusion: The disallowance under section 37(1) was not sustained and the issue was decided in favour of the assessee.

Issue (ii): Whether the payment to the foreign agent constituted fees for technical services under section 9(1)(vii) of the Income-tax Act, 1961, attracting disallowance under section 40(a)(i) for failure to deduct tax at source.

Analysis: The Revenue accepted that the issue stood covered against it by binding decisions of the Court. In that view, the question did not survive as a substantial question of law.

Conclusion: The issue was not entertained and stood against the Revenue.

Final Conclusion: The appeal failed at the threshold as no substantial question of law arose, and the deletion of the disallowance was left undisturbed.

Ratio Decidendi: Concurrent findings of fact on the genuineness and business purpose of expenditure, unless shown to be perverse, do not give rise to a substantial question of law in an appeal under section 260A of the Income-tax Act, 1961.

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