PR. COMMISSIONER OF INCOME TAX 3 NAGPUR vs BALLARPUR INDUSTRIES LTD.

The Supreme Court addressed the issue of whether a payment of Rs.3.25 crores made by the respondent-assessee to Mr. G.R. Hada could be claimed as a revenue expenditure under the Income Tax Act. The Court upheld the decision of the Income Tax Appellate Tribunal, which had allowed the deduction, stating that the payment was made in the course of business operations and thus qualified as revenue expenditure. The appeal by the Commissioner of Income Tax was dismissed, affirming the Tribunal's ruling.