Log In

| Recover password

When once admitted that the payment of speed money is a trade practice which is followed by the shipping agents functioning for speedy completion of their work no disallowance out of such expenses be made solely on the ground that the assessee had produced the self-made cash vouchers which showed that the payment was made by cash to each gang leader and the identity of the gang leader is not verifiable and the recipients are not assessee’s employees as was held in[2021] 435 ITR 143 (Kar).
It is found that the normal practice in the line of business of the assessee is to pay certain extra amounts to port laborers as speed money for promptly and speedily carrying out the labor work of handling cargo beyond working hours.
The High Court deleted the Adhoc disallowance made by the appellate authority and tribunal in this case.
In the context of payment of secret commission in [2016], 386 ITR 233 (Bom) the Court in the absence of any evidence brought on record by the assessee to establish that payment of commission was a matter of trade practice in its line of business held that the secret commission could not be allowed.

Leave a Reply

Your email address will not be published.

error: Do not copy the content of this website.