https://www.taxtmi.com/caselaws?id=178894 In determining whether expenditure is laid out for business purposes, the assessee's commercial judgment is ordinarily respected, and the taxing authority cannot replace it with its own view of reasonableness where the transaction is genuine. That principle does not apply where surrounding circumstances show an oblique or extra-commercial purpose. Here, the assessee purchased styron from a concern with identical partners at a price far above the market rate paid to another supplier, and the arrangement resulted in deflation of profits. The explanation that the other concern was closing down did not displace the inference from those circumstances. The Tribunal was justified in holding that the higher price was paid for extra-commercial reasons. en-us Tue, 23 Apr 1963 00:00:00 +0530 Mon, 15 Feb 2016 18:54:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=178894 In determining whether expenditure is laid out for business purposes, the assessee's commercial judgment is ordinarily respected, and the taxing authority cannot replace it with its own view of reasonableness where the transaction is genuine. That principle does not apply where surrounding circumstances show an oblique or extra-commercial purpose. Here, the assessee purchased styron from a concern with identical partners at a price far above the market rate paid to another supplier, and the arrangement resulted in deflation of profits. The explanation that the other concern was closing down did not displace the inference from those circumstances. The Tribunal was justified in holding that the higher price was paid for extra-commercial reasons. Case-Laws Income Tax Tue, 23 Apr 1963 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=178894