https://www.taxtmi.com/caselaws?id=214309 Karnataka HC dismissed appeals regarding deduction of commission payments under section 37. The court held that payments made to directors for awarding construction contracts constituted illegal gratification and kickbacks, not legitimate business expenditure. The arrangement involved collusion where directors inflated tender prices and received the difference as commission. Such payments were deemed not incurred wholly and exclusively for business purposes, violating section 37 requirements. The court applied the pari delicto doctrine, refusing to assist parties involved in illegal transactions. The commission payments were characterized as a scheme to siphon company funds and could not qualify for tax deduction despite being labeled as business expenditure. en-us Tue, 07 Sep 2010 00:00:00 +0530 Mon, 03 Mar 2025 16:54:45 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=214309 Karnataka HC dismissed appeals regarding deduction of commission payments under section 37. The court held that payments made to directors for awarding construction contracts constituted illegal gratification and kickbacks, not legitimate business expenditure. The arrangement involved collusion where directors inflated tender prices and received the difference as commission. Such payments were deemed not incurred wholly and exclusively for business purposes, violating section 37 requirements. The court applied the pari delicto doctrine, refusing to assist parties involved in illegal transactions. The commission payments were characterized as a scheme to siphon company funds and could not qualify for tax deduction despite being labeled as business expenditure. Case-Laws Income Tax Tue, 07 Sep 2010 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=214309