1991 (4) TMI 36

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... -In this departmental reference made under section 256(2) of the Income-tax Act, 1961, pertaining to the assessee's assessment year 1962-63, the Income-tax Appellate Tribunal has referred to us the following questions of law for our opinion : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that secret commission, although disallowed in asse....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng activities and partly from trading. On the basis of the sale, the ratio was 33 : 37. The assessee claimed in its return that it had paid secret commission to one A. M. Khoparkar amounting to Rs. 29,934, which should be deducted from the taxable income while applying the provisions of section 104. The Tribunal came to the conclusion that, if this amount of secret commission is deducted from the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... (2) legal charges, (3) any such expenditure as is referred to in clause (c) of section 40, (4) any expenditure claimed as a revenue expenditure but not allowed to be deducted as such and not resulting in the creation of an asset or enhancement in the value of an existing asset. " "(iv) 'gross total income' means the total income computed in accordance with the provisions of this Act befo....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nt, the provisions of section 109(i)(g)(4) would clearly be attracted. We are of the view that the secret commission would have to be deducted for the purpose of determining the distributable income under section 104 of the Act. There is no dispute that, if such deduction is made, there is no liability under section 104 of the Act. We are fortified in our view by the judgment of the Supreme Cou....