2014 (1) TMI 1259

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.... Principal by the agent (appellant) for carrying out works at the port for and on behalf of the Principal. 2. The learned CIT (A) has grossly erred in granting relief of Rs. 3,00,000/- out of the following disallowances made by the Assessing Officer: Gift Expenses Rs. 4,68,475/- Chandla Expenses Rs. 4,03,497/- Diwali Expenses Rs. 2,00,000/- Business Promotion Rs. 5,00,000/- 3 Ground no.1 is regarding disallowance of miscellaneous expenses incurred by the assessee on behalf of the principle. 4 We have heard the ld AR of the assessee as well as the ld DR and considered the relevant material. At the outset, we note that an identical issue has been considered and decided by the Tribunal in assessee's own case fo....

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....nditure - Held, yes - Whether such payment is not an illegal payment or a payment opposed to public policy as dock workers are not Government employees - Held, yes - Whether, however, where assessee failed to establish that actually payment had been made to extent indicted in vouchers, 25 per cent of expenditure incurred by way of payment of speed money was to he disallowed on estimate basis - held, yes." From the above it is clear that if it can be finally found that money was paid to the government employees only then this would be covered by the Explanation to section 37(1) otherwise the expenditure would be justified. In that case also in the absence of details it was assumed that speed money was paid to the extent of 25% to governme....

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....he assessee as well as the ld DR and considered the relevant material. It was pointed out by the ld AR of the assessee that a similar issue has been considered and decided by the Tribunal in assessee's own case for AY 2006-07 in ITA no. 263/Mum/08 vide order dated 12.12.2009 in paras 8 to 10 as under: 8 . Ground Nos. 1 & 2 in Revenue's appeal are against the relief allowed by the CIT(A)out of Diwali expenses and gift expenses. 9. At the time of hearing, both the parties have agreed that the Tribunal in the earlier year in the assessee's own case has sustained the disallowance by 50% out of the disallowance sustained by the Id. CIT(A) in this regard and, therefore, the issue may be decided accordingly. 10. After carefully hearing th....