Eastern Investments Ltd. v. CIT

38 ITR 601Supreme Court of India1960#222 most cited

What is Eastern Investments Ltd. v. CIT authority for?

Expenditure must be commercially expedient for carrying on the business, and it is not for revenue authorities to dictate how an assessee should conduct its business. The court will not question the business expediency of a transaction, even if a third party also benefits.

346

judgments rely on this decision, according to BharatTax’s citation analysis of 367,164 Indian tax judgments — from 2006 to 2026.

Also referred to as

Eastern Investments Ltd. v. CIT · 38 ITR 601 · commercial expediency · business expediency · related party transaction · enduring benefit · business expenditure · prudent businessman · disallowance of interest expenditure

Sections most often in play

Section 143(3)Section 147Section 148Section 14ASection 37Section 234BSection 40A(2)(b)Section 37(1)

Issues it is cited on

interest on interestaccumulated profitssection 40a(2)(b)commercial expediencyrelated party transactionbusiness expediencysection 194jenduring benefitsection 40a(2)section 14a(2)disallowance of interest expendituresection 36(1)(vii)

Judgments citing Eastern Investments Ltd. v. CIT

Indus Mobile Distribtion Pvt. Ltd., Chennai vs. ACIT Central Circle 1(1), Chennai

In the result, the appeal filed by the assessee is allowed

ITA 915/CHNY/2019[2011-12]Status: DisposedITAT Chennai16 Sept 2021AY 2011-12

Bench: Shri Duvvuru Rl Reddy & Shri G. Manjunathaआयकर अपील सं./I.T.A. No. 915/Chny/2019 िनधा"रण वष"/Assessment Year: 2011-12 M/S. Indus Mobile Distribution Pvt. Ltd., The Assistant Commissioner Of No. 281, Ttk Road, Alwarpet, Vs. Income Tax, Central Circle 1(1), Chennai 600 018. Chennai. [Pan:Aabci6304D] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri B. Ramakrishnan, C.A. ""थ" की ओर से/Respondent By : Shri G. Johnson, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 01.09.2021 घोषणा की तारीख /Date Of Pronouncement : 16.09.2021 आदेश /O R D E R Per Duvvuru Rl Reddy: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 13, Chennai, Dated 22.11.2017 Relevant To The Assessment Year 2011-12. The Effective Grounds Raised In The Appeal Relate To Confirmation Of Disallowance Of Depreciation On Trademark & Confirmation Of Disallowance Of Advertisement Expenditure & Professional Charges.

For Appellant: Shri B. Ramakrishnan, C.AFor Respondent: Shri G. Johnson, Addl. CIT

…of incurring an expenditure and he cannot step into the shoes of the assessee as how to conduct the business of the assessee. In this connection, reliance can be placed on the decision of Hon’ble Supreme Court in the case of Eastern Investments Ltd. vs. CIT, 20 ITR 1. Recently the Hon’ble Delhi High Court in the case of CIT vs. EKL Appliances Ltd, 345 ITR 241 after referring the above said judgment of Supreme Court, wherein it was held as follows: “19. There is no reason why the OECD guidelines should not be taken as a valid input in the present case in judging the action of the Transfer Pricing Officer. In fact…

Dy. Commissioner of Income Tax, Circle-2(1)., Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1663/HYD/2017[2014-15]Status: DisposedITAT Hyderabad30 Aug 2021AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…and in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case, (supra) has been approved by this Court in several decisions e.g.Eastern Investments Ltd. v. CIT [1951] 20 ITR 1, CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601 etc. 24. In our opinion, the High Court as well as the Tribunal and other income-tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (…

Dy. Commissioner of Income Tax, Circle-2(1)., Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1121/HYD/2017[2013-14]Status: DisposedITAT Hyderabad30 Aug 2021AY 2013-14

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…and in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case, (supra) has been approved by this Court in several decisions e.g.Eastern Investments Ltd. v. CIT [1951] 20 ITR 1, CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601 etc. 24. In our opinion, the High Court as well as the Tribunal and other income-tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (…

Dy. Commissioner of Income Tax, Circle-2(1)., Hyderabad vs. Ksk Energy Company Private Limited., Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1120/HYD/2017[2011-12]Status: DisposedITAT Hyderabad30 Aug 2021AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…and in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case, (supra) has been approved by this Court in several decisions e.g.Eastern Investments Ltd. v. CIT [1951] 20 ITR 1, CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601 etc. 24. In our opinion, the High Court as well as the Tribunal and other income-tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (…

DCIT, Circle-2(1), Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1745/HYD/2016[2010-11]Status: DisposedITAT Hyderabad30 Aug 2021AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…and in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case, (supra) has been approved by this Court in several decisions e.g.Eastern Investments Ltd. v. CIT [1951] 20 ITR 1, CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601 etc. 24. In our opinion, the High Court as well as the Tribunal and other income-tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (…

Joint Commissioner of Income Tax Ltu (OSD) Circle-1, Bangalore vs. M/S Toyota Kirloskar Motors Pvt Ltd, Bangalore

In the result, the appeal filed by the Revenue and assessee are partly allowed for statistical purposes

ITA 2016/BANG/2018[2013-14]Status: DisposedITAT Bangalore18 Aug 2021AY 2013-14

Bench: Shri George George K, Jm & Shri B.R.Baskaran, Am

For Appellant: Sri.P.C.Kincha, CAFor Respondent: Sri.Muzaffar Hussaain, CIT-DR
Section 192

…prudence. The Hon’ble Court held that it is well settled that the revenue cannot dictate to the assessee as to how he should conduct his business and it is not for them to tell the assessee as to what expenditure the assessee can incur (Eastern Investment Ltd 20 ITR 1 (SC), Walchand & Co 65 ITR 381 (SC) followed). Even Rule 10B(1)(a) does not authorise disallowance of expenditure on the ground that it was not necessary or prudent for the assessee to have incurred the same. In light of the aforesaid decisions, we are of the view that the stand taken by the assessee in this regard deserves to be accepted. It is cle…

M/S. Toyota Kirloskar Motor Private Limited, Bangalore vs. The Assistant Commissioner of Income Tax, Circle-1, Ltu, Bangalore

In the result, the appeal filed by the Revenue and assessee are partly allowed for statistical purposes

ITA 1972/BANG/2018[2013-14]Status: DisposedITAT Bangalore18 Aug 2021AY 2013-14

Bench: Shri George George K, Jm & Shri B.R.Baskaran, Am

For Appellant: Sri.P.C.Kincha, CAFor Respondent: Sri.Muzaffar Hussaain, CIT-DR
Section 192

…prudence. The Hon’ble Court held that it is well settled that the revenue cannot dictate to the assessee as to how he should conduct his business and it is not for them to tell the assessee as to what expenditure the assessee can incur (Eastern Investment Ltd 20 ITR 1 (SC), Walchand & Co 65 ITR 381 (SC) followed). Even Rule 10B(1)(a) does not authorise disallowance of expenditure on the ground that it was not necessary or prudent for the assessee to have incurred the same. In light of the aforesaid decisions, we are of the view that the stand taken by the assessee in this regard deserves to be accepted. It is cle…

M/S Zeenath Transport Company, Bellary vs. The Assistant Commissioner of Income Tax Circle-1, Bellary

In the result, appeal filed by the assessee stands partly allowed as indicated herein above

ITA 1780/BANG/2018[2012-13]Status: DisposedITAT Bangalore18 Aug 2021AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Siva Prasad Reddy, AdvocateFor Respondent: Ms. Neera Malhotra, CIT (DR)
Section 135Section 37Section 37(1)

…IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No.1780 - 1782/Bang/2018 Assessment Year : 2012-13 – 2014-15 M/s Zeenath Transport The Asst. Commissioner of Company, Income-Tax, Mine Owners, Zeenath Circle-1, House, Vs. Bellary. Door No.24,Ward No.22, Main Road, Cowl Bazar, Bellary-583 102. PAN – AAAFZ 0512 E APPELLANT RESPONDENT Assessee by : Shri Siva Prasad Reddy, Advocate Revenue by : Ms. Neera Malhotra, CIT (DR) Date of Hearing : 23-07-2021 Date of Pronouncement : 18-08-2021 ORDER PER BEENA PILLAI, JUDIC…

Goodyear India Ltd., Faridabad vs. Neac, Delhi

In the result, the appeal of the assessee is allowed

ITA 467/DEL/2021[2016-17]Status: DisposedITAT Delhi11 Aug 2021AY 2016-17

Bench: Shri Kul Bharat & Dr.B.R.R.Kumarassessment Year : 2016-17 Goodyear India Ltd., Vs Neac, Mathura Road, Ballabhgarh, Delhi. Faridabad, Haryana-121001. Pan-Aaacg3511H Appellant Respondent Appellant By Sh. Neeraj Jain, Adv. & Sh. Abhishek Agarwal, Adv. Respondent By Sh. Surendra Pal, Cit Dr Date Of Hearing 08.07.2021 Date Of Pronouncement 11.08.2021

Section 143(3)Section 144CSection 234B

…len Manufacturers vs CIT 72 ITR 612. (iii) Aluminum Corporation of India Ltd. vs CIT 86 ITR 11. (iv) CIT vs Panipat Woollen & General Mills Co.Ltd. 103 ITR 666. (v) Sassoon J David and Co.P. Ltd. vs CIT 118 ITR 261 (SC). (vi) CIT vs Chandulal Keshavlal & Co. 38 ITR 601 (SC). (vii) SA Builders Limited vs CIT 288 ITR 1 (SC). (viii) CIT vs. Sales Magnesite P. Ltd. 214 ITR 1(Bom). (ix) JR Patel & Sons P. Ltd. vs. CIT : 69 ITR 782 (Guj) . (x) CIT vs. Khambhatta Family Trust (215 Taxman 602) (Guj). (xi) Star India P. Ltd.: 103 ITD 73 (TM) (xii) National Panasonic (India) Ltd. vs. JCIT: ITA 3238/Del/2002 (Del) (…

M/S Glaxosmithkline Asia Pvt. Ltd., Gurgaon vs. DCIT, Chandigarh

In the result, the appeal of the assessee is partly allowed

ITA 532/CHANDI/2014[2006-07]Status: DisposedITAT Chandigarh30 Jul 2021AY 2006-07
For Appellant: Shri Ajay Vohra, Sr.AdvFor Respondent: Smt. C. Chandrakanta, CIT DR
Section 143(3)Section 250(6)

…rty. Reliance is placed on the following decisions: ITA No.2453/Del/2016 A.Y. 2005-06 & ITA No.532/Del/2014 A.Y. 2006-07 19 • Sassoon J. David and Co. P. Ltd. v. CIT: 118 ITR 261 (SC) [Pg. 228 of PB-CL-2 for AY 2006-07] • CIT v. Chandulal Keshavlal & Co. 38 ITR 601 (SC) IPg. 230 of PB-CL-2 for AY 2006-07) • SA Builders v. CIT: 288 ITR 1 (SC) [Pg. 236 of PB-CL-2 for AY 2006-07] • CIT v. Sales Magnesite (Pvt.) Ltd.: 214 ITR 1 (Bom) • J.R. Patel & Sons (P) Ltd. v. CIT: 69 ITR 782 (Guj) • CIT v. Adidas India Marketing (P) Ltd: 195 Taxman 256 (Del) [Pg. 243 of PB-CL-2 for AY 2006-07] • CIT v. Agra Beverages Corpo…

Mason Infrastructure Pvt. Ltd., New Delhi vs. DCIT, Circle- 16(2), New Delhi

In the result, appeal of the assessee is allowed

ITA 3409/DEL/2018[2013-14]Status: DisposedITAT Delhi23 Jul 2021AY 2013-14

Bench: Shri Prashant Maharishi & Shri K.Narasimha Chary

Section 143(3)

…d in order to indirectly facilitate the carrying on the business. The above test in Atherton's case (supra) has been approved by this Court in several decisions e.g. Eastern Investments Ltd. v. CIT r 19511 20 ITR i. CIT v. Chandulai Kesha via I and Co. ri9601 38 ITR 601 etc. 24. In our opinion, the High Court as well as the Tribunal and other Income-tax Authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company…

Sri. B. Rudragouda, Bellary vs. The Deputy Commissioner of Income Tax, Circle- 1, Bellary

In the result, the appeal is allowed

ITA 315/BANG/2020[2016-17]Status: DisposedITAT Bangalore15 Apr 2021AY 2016-17

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri Chythanya K.K., AdvocateFor Respondent: Shri Muzaffar Hussain, CIT(DR)(ITAT), Bengaluru
Section 37Section 37(1)

…. [1967] 65 ITR 381 (SC) ITA Nos.314 & 315/Bang/2020 Page 5 of 70 (18) CIT v. Panipat Woollen & General Mills Co. Ltd. [1976] 103 ITR 66 (SC) (19) Mysore Minerals Ltd. v. CIT (ITA No.464/Bang/2014 dtd. 25.1.2019) (20) CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601 (SC) (21) CIT v. Dalmia Cement P. Ltd. [2002] 254 ITR 377 (Del) (22) Salgaocar Mining Industries (P.) Ltd. [2019] 108 taxmann.com 116 (Bom) 6. Further it is submitted that the above expenditure incurred by the assessee is for welfare and cannot be construed as opposed to public policy so as to invoke the Explanation 2 to section 37 of the Act and…

Sri. B. Rudragouda, Bellary vs. The Assistant Commissioner of Income Tax, Circle- 1, Bellary

In the result, the appeal is allowed

ITA 314/BANG/2020[2015-16]Status: DisposedITAT Bangalore15 Apr 2021AY 2015-16

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri Chythanya K.K., AdvocateFor Respondent: Shri Muzaffar Hussain, CIT(DR)(ITAT), Bengaluru
Section 37Section 37(1)

…. [1967] 65 ITR 381 (SC) ITA Nos.314 & 315/Bang/2020 Page 5 of 70 (18) CIT v. Panipat Woollen & General Mills Co. Ltd. [1976] 103 ITR 66 (SC) (19) Mysore Minerals Ltd. v. CIT (ITA No.464/Bang/2014 dtd. 25.1.2019) (20) CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601 (SC) (21) CIT v. Dalmia Cement P. Ltd. [2002] 254 ITR 377 (Del) (22) Salgaocar Mining Industries (P.) Ltd. [2019] 108 taxmann.com 116 (Bom) 6. Further it is submitted that the above expenditure incurred by the assessee is for welfare and cannot be construed as opposed to public policy so as to invoke the Explanation 2 to section 37 of the Act and…

The DCIT, Circle-4, Ahmedabad vs. Ghcl Limited, Ahmedabad

ITA 976/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad05 Mar 2021AY 2009-10
For Appellant: Shri S. N. Soparkar, Sr. A.R. &For Respondent: Shri Mohd. Usman, CIR-D.R. &
Section 143(2)Section 144C(2)(b)Section 144C(5)Section 14ASection 37(1)Section 92C

…t of the arrangement which came into force with effect from 1-4-1956, even an indirect benefit was derived or was expected to be derived by the assessee-company. Applying the principle approved of by the Supreme Court in Eastern Investments Ltd. v. CIT [1951] 20 ITR 1 CSC), it was clear that in the instant case, in the light of the additional materials which had been brought on the record of the case, the assessee-company did derive indirect benefit from the remuneration which it paid to its own managing director. Thus the services which A rendered to the managed company for the period commencing from 1-4-1956, w…

Ghcl Limited, Ahmedabad vs. The Dy.CIT., Circle-4, Ahmedabad

ITA 1042/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad05 Mar 2021AY 2009-10
For Appellant: Shri S. N. Soparkar, Sr. A.R. &For Respondent: Shri Mohd. Usman, CIR-D.R. &
Section 143(2)Section 144C(2)(b)Section 144C(5)Section 14ASection 37(1)Section 92C

…t of the arrangement which came into force with effect from 1-4-1956, even an indirect benefit was derived or was expected to be derived by the assessee-company. Applying the principle approved of by the Supreme Court in Eastern Investments Ltd. v. CIT [1951] 20 ITR 1 CSC), it was clear that in the instant case, in the light of the additional materials which had been brought on the record of the case, the assessee-company did derive indirect benefit from the remuneration which it paid to its own managing director. Thus the services which A rendered to the managed company for the period commencing from 1-4-1956, w…

Shri Rameshwar Lal Samdani, Bhilwara vs. ITO, Bhilwara

In the result, the appeal of the assessee is allowed

ITA 264/JODH/2017[2013-14]Status: DisposedITAT Jodhpur28 Jan 2021AY 2013-14

Bench: Shri Sandeep Gosain & Shri Manoj Kumar Aggarwalshri Rameshwar Lal Samdani, Vs. I.T.O., D-43, Shastri Nagar, Bhilwara Ward-3, (Raj)-311001. Bhilwara. Pan No. Adqps 6311 K Assessee By Shri Ajay Moondra Revenue By Shri K.C. Badhok, Cit-Dr Date Of Hearing 03.11.2020 Date Of Pronouncement 29/01/2021

Section 143(3)Section 56Section 57

…decision of Hon'ble Supreme Court in the case of S.A. Builders Limited v/s CIT reported in 288 ITR 0001, Seth R. Dalmia Vs. CIT reported in 110 ITR 644 (SC) and CIT v/s Rajendra Prasad Moody, 115 ITR 0519 (SC) and Eastern Investments Ltd. v/s CIT reported in 20 ITR 1, 4 (SC). The Hon'ble Supreme Court in the case of S.A. Builders v/s CIT reported in 288 ITR 0001. The Hon'ble High Court held as under: - "16. We have considered the submissions of the respective parties. The question involved in this case is only about the allowability of the interest on borrowed funds and hence we are dealing only with that quest…

Michelin India Pvt. Ltd., Gurgaon vs. Addl. CIT, New Delhi

Appeals are partly allowed

ITA 3167/DEL/2017[2010-11]Status: DisposedITAT Delhi24 Dec 2020AY 2010-11

Bench: Shri Anil Chaturvedi & Shri Kuldip Singh

For Appellant: Shri Nageshwar Rao, AdvFor Respondent: Shri Ajit Kr. Singh, CIT-DR
Section 143Section 144CSection 234CSection 271(1)(c)Section 92C

…he assessee though the brand is owned by the AE does not warrant any disallowance in the hands of the assessee. Whether the expenditure has been incurred wholly and exclusively for the purpose of business, hon’ble Apex Court in the case of Chandulal Keshavlal 38 ITR 601, had observed as under:- “……in deciding whether a payment of money is a deductible expenditure, one has to take into consideration questions of commercial experience and principle of ordinary commercial trading. Another test is whether the transaction is properly entered into as a part of the Assessee legitimate commercial undertaking in order to…

DCIT, New Delhi vs. M/S. Michelin India Pvt. Ltd., Faridabad

Appeals are partly allowed

ITA 3125/DEL/2017[2010-11]Status: DisposedITAT Delhi24 Dec 2020AY 2010-11

Bench: Shri Anil Chaturvedi & Shri Kuldip Singh

For Appellant: Shri Nageshwar Rao, AdvFor Respondent: Shri Ajit Kr. Singh, CIT-DR
Section 143Section 144CSection 234CSection 271(1)(c)Section 92C

…he assessee though the brand is owned by the AE does not warrant any disallowance in the hands of the assessee. Whether the expenditure has been incurred wholly and exclusively for the purpose of business, hon’ble Apex Court in the case of Chandulal Keshavlal 38 ITR 601, had observed as under:- “……in deciding whether a payment of money is a deductible expenditure, one has to take into consideration questions of commercial experience and principle of ordinary commercial trading. Another test is whether the transaction is properly entered into as a part of the Assessee legitimate commercial undertaking in order to…

DCIT, New Delhi vs. M/S. Michelin India Tyres Pvt. Ltd., New Delhi

Appeals are partly allowed

ITA 6128/DEL/2014[2009-10]Status: DisposedITAT Delhi24 Dec 2020AY 2009-10

Bench: Shri Anil Chaturvedi & Shri Kuldip Singh

For Appellant: Shri Nageshwar Rao, AdvFor Respondent: Shri Ajit Kr. Singh, CIT-DR
Section 143Section 144CSection 234CSection 271(1)(c)Section 92C

…he assessee though the brand is owned by the AE does not warrant any disallowance in the hands of the assessee. Whether the expenditure has been incurred wholly and exclusively for the purpose of business, hon’ble Apex Court in the case of Chandulal Keshavlal 38 ITR 601, had observed as under:- “……in deciding whether a payment of money is a deductible expenditure, one has to take into consideration questions of commercial experience and principle of ordinary commercial trading. Another test is whether the transaction is properly entered into as a part of the Assessee legitimate commercial undertaking in order to…

Michelin India Pvt. Ltd., Gurgaon vs. DCIT, New Delhi

Appeals are partly allowed

ITA 5774/DEL/2014[2009-10]Status: DisposedITAT Delhi24 Dec 2020AY 2009-10

Bench: Shri Anil Chaturvedi & Shri Kuldip Singh

For Appellant: Shri Nageshwar Rao, AdvFor Respondent: Shri Ajit Kr. Singh, CIT-DR
Section 143Section 144CSection 234CSection 271(1)(c)Section 92C

…he assessee though the brand is owned by the AE does not warrant any disallowance in the hands of the assessee. Whether the expenditure has been incurred wholly and exclusively for the purpose of business, hon’ble Apex Court in the case of Chandulal Keshavlal 38 ITR 601, had observed as under:- “……in deciding whether a payment of money is a deductible expenditure, one has to take into consideration questions of commercial experience and principle of ordinary commercial trading. Another test is whether the transaction is properly entered into as a part of the Assessee legitimate commercial undertaking in order to…