TaxTMI 
TaxTMI 
TaxTMI 
1992 (3) TMI 361
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....nt year 1959-60 and a part of disallowance ranging from 7.27 percent of the claim to 24.08 percent of the claim was being made by the Assessing Officer, except for assessment years 1972- 73 and 1973-74 when the entire claim was disallowed by the AO but only a disallowance of about 14 percent was sustained by the Tribunal. However, in this year the AO, went into the matter in greater detail. He made enquiries regarding the nature of the commission. The assessee exclaimed that the printing ink was sold to printing presses and these printing presses did not continue patronage enjoyed by the assessee on account of nuisance value of petty employees of the press. The secret commission was paid to these petty employees, whose wages were not signif....
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....n later years. If there were good reasons and correct appraisal of facts, the Assessing Officer could depart from the past practice. He was also of the view that even payment of secret commission to private parties was opposed to public policy. Further, not only that the expenses were unvouched but no evidence had been produced of any practice of such payment in the trade, except for M/s. Manu Printing Ink & Rollers, which was only a sister concern of the assessee. Even otherwise the CIT (Appeals) was of the opinion that the amount claimed was excessive. The assessee had co-related the secret commission to the turnover and worked out the percentage, but it should really be co-related to the net profit. He observed that the income disclosed ....
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....essee thereafter invited attention to the decision of the Tribunal in Indira Agencies [IT Appeal No. 2282 (Bom.) of 1984] dated 10-11- 1987, which had business as retailer in roller, printing ink for printing presses. Secret commission had been allowed as a deduction. Similarly, secret commission had been allowed by the Tribunal in the case of D.S. V. Chemicals (P.) Ltd. [IT Appeal No.4897 (Bom.) of 1985, dated 28-9-1989] and Rainbow Ink & Varnish Mfg. Co. [IT Appeal No. 3848 Bom. of 1985 dated 28-4-1989]. The last-mentioned company was manufacturing various types of inks and varnishes. Finally the learned counsel relied on the decision of the Bombay High Court in CIT v. Goodlass Nerolac Paints Ltd. [1991] 188 ITR 1 and submitted that the....
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....assessee required reconsideration. He added that if other manufacturers could run their business without payment of secret commission, there was no need for the assessee to incur such an expenditure. For these reasons he submitted that the disallowance in full should be confirmed. 10. We have considered the submissions of both sides carefully. A number of Tribunal decisions have been cited and there are some further citations of other High Courts in the order of the CIT (Appeals) also. However, we are of the opinion that now that the two decisions of the Bombay High Court in Goodlass Nerolac Paints Ltd.'s case [1982] 137 ITR 58 (supra ) and Goodlass Nerolac Paints Ltd. [1991] 188 ITR 1 case (supra) are available, our decision will be gover....
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....satisfactory evidence to establish the payments, and has also to satisfy the authorities that the payments were made for the purpose of business. No doubt, for the earlier year, the matter came up before this court. The Tribunal had come to the conclusion that the assessee had not proved the payments by way of secret commission and as such was not entitled to deduction. This being a finding of fact, our court declined to interfere as the view taken by the Tribunal was a possible view. In the present case, the Tribunal, it appears, had to consider some new facts and aspects of the matter. It found that the assessee was carrying on business in the line in which payments were made to the employees of the customers to keep them on the right si....
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....he persons to whom the amounts were paid. Having then regard to the material referred to and relied upon by the Tribunal for coming to the conclusion in favour of the allowability of the claim for deduction, we decline to interfere, as the conclusion of the Tribunal is a finding of fact and is based on cogent material." 11. It is therefore clear that the question of payment of commission has to be determined by the Tribunal as a question of fact taking into account all the attendant facts and circumstances of the case. In the present case we have the confirmations from the two salesman, Shri S.S. Nadkarni and Shri D.K. Harpalani before the Assessing Officer, the internal vouchers prepared by the assessee containing signature of the as....