Section 37(1) of the Income-tax Act, 1961

HIGH COURT OF DELHI Gurcharanjeet Singh & Sons v Income-tax Officer MADAN B. LOKUR AND DR. S. MURALIDHAR, JJ. IT APPEAL NO. 1564 OF 2006 October 5, 2007 Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1998-99 - Assessee running a guest house, paid commission to auto rikshaw drivers and rikshaw pullers for bringing customers at rate of 34.93 per cent of total rent received by assessee - On basis of vouchers prepared by assessee and other evidence, Assessing Officer came to conclusion that commission paid was very high and estimated same at 15 per cent of rental income and disallowed balance -On appeal, Commissioner (Appeal) deleted entire disallowance - However, Tribunal held that Assessing Officer was justified in allowing only part of commission paid but increased commission allowable at 25 per cent of actual rent receipts - Whether since matter pertaining to percentage of allowance of commission was a matter within discretion of lower authorities, Tribunal was justified in its conclusion and, therefore, no substantial question of law arose for consideration - Held, yes