BENGAL ENAMEL WORKS LTD. vs COMMISSIONER OF INCOME-TAX, WEST BENGAL

The Supreme Court held that under Section 10(2)(xv) of the Income-tax Act, 1922, the determination of whether an expenditure was incurred wholly and exclusively for business purposes is a question of fact and law. The Court ruled that tax authorities cannot substitute their judgment for that of the employer regarding reasonable remuneration, but may disallow claims if the payment is not real or not incurred in the course of business. The Court upheld the decisions of the lower authorities, confirming the disallowance of part of the remuneration paid to a technical adviser due to extra-commercial considerations.