1982 (1) TMI 9

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....red by K. K. DUBEY J.-This is a reference made by the Income-tax Appellate Tribunal referring for our answer, the following question of law: " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the payment of Rs. 9,328 in assessment year 1965-66 and Rs. 20,053 in assessment year 1966-67, towards income-tax arrears of M/s. Unite....

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....e business. The Tribunal allowed these payments as deductions under s. 37(1) of the I.T. Act, 1961. The learned standing counsel for the Department submitted before us that the assessee was not liable to pay the income-tax dues of the United Transport Company and the said dues cannot be allowed as business expenditure under s. 37. The learned counsel had also submitted that in case the assessee....

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....nd can be allowed is of commercial expediency. It was also laid down that a payment voluntarily made in order to facilitate the carrying on of the business on the ground of commercial expediency may amount to expenditure wholly and exclusively for the purpose of the business. Tested in the light of these principles, in our opinion, the Tribunal was right in holding that the expenditure incurred in....