Law:

Section:

2008] 305 ITR 438 [2009] 180 Taxman 605 (Madras) HIGH COURT OF MADRAS Commissioner of Income-tax v. Sapthagiri Traders Ltd.* P.D. DINAKARAN AND P.P.S. JANARTHANA RAJA, JJ. T.C. (A.) NOS. 1035 TO 1038, 1065, 1066, 1072 AND 1073 OF 2007â-  JULY 11, 2007 Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment years 1993-94 and 1994-95 - Assessee was in business of purchase and sale of IMFL products - It claimed that it had purchased packing materials, viz., bottles, etc., and had given them to other company to get liquor filled therein and then sold them - Its claim for deduction of cost of packing materials was disallowed by Assessing Officer on ground that packing materials were readily available in market at far lower prices; and that assessee had deliberately routed purchases of packing materials through intermediary companies with an intention to inflate purchase price and thereby reduced income liable to tax - On appeal, Commissioner (Appeals) as well as Tribunal allowed assessee's claim holding that there was no doubt as to reality of purchasing of packing materials as payments were made to parties only by way of cheques - Whether it was not for revenue to question decision of assessee to purchase goods from a particular concern, unless it was established that transaction involved pushing back of part of profit to assessee itself - Held, yes -Whether further, in view of factual findings recorded by appellate authorities, assessee's claim was rightly allowed - Held, yes FACTS The assessee-company was in the business of purchase and sale of IMFL products. It claimed that it had purchased the packing materials, viz., bottles, etc., had given them to other company to get the liquor filled therein and then sold them. It, therefore, claimed deduction of the cost of the packing materials as business expenditure. The Assessing Officer disallowed the assessee's claim on the ground that the packing materials were readily available in market at far lower prices; and that the assessee had deliberately routed the purchases of packing materials through the intermediary companies with the intention to inflate the purchase price…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492