Case Law Details
1. For the assessment years in question, the assessee had made deduction of payments said to have been made to doctors towards MRI Commission, CT Scan and USG Commission, Pathology Collection Commission and CT Commission (National Hospital). However, the assessing officer disallowed the said claims on the ground that the assessee had not produced the vouchers. Assessing officer had also taken note of the contention of the assessee that there is no practice of keeping the vouchers. It was also the case of the assessee that the payees of the assessees are against disclosing their names.
2. However, the First Appellate Authority in Annexure B order, referred to the orders passed by the assessing officer in certain previous years and allowed 10% of the commissions paid. Revenue challenged the order of the First Appellate Authority before the Tribunal and Tribunal dismissed the appeals by Annexure C order holding that it was the practice followed in the business and that the assessee had been following the same consistently. The Tribunal also held that in its opinion the payments made were not opposed to public policy. It is in these circumstances that the Revenue has filed these appeals and the common question of law framed for the consideration of this court are the following:–
“1. Whether, on the facts and in the circumstances of the case and also in view of the fact that both payments and receipts were unaccounted the Tribunal is right in law allowing a percentage of the total collections as an expenditure? And is not the conclusion of the ITAT perverse and illegal?
2. Whether, on the facts and in the circumstances of the case is not order of the Tribunal encouraging illegal economy and against public policy?”
3. We heard the Senior Counsel for the Revenue and the learned counsel for the assessee.
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