2003 (4) TMI 218 - AT - Income Tax

Summary

Issues:
1. Disallowance of payment to photo vision.
2. Disallowance of amount paid for purchase of wall clock.
3. Disallowance of interest expenditure claimed by the assessee.
4. Disallowance of miscellaneous expenses.
5. Disallowance of travelling expenses.

Issue 1 - Disallowance of payment to photo vision:
The appeal concerns the disallowance of Rs. 1350 paid to photo vision for taking photographs of a new product for printing in a magazine. The expenditure was deemed to be for business purposes, and the AO was directed to allow it.

Issue 2 - Disallowance of amount paid for purchase of wall clock:
The dispute revolves around the disallowance of Rs. 2810 paid for the purchase of a wall clock. The assessee contended that the wall clock was bought for office and plant use, not as a gift. The Tribunal found the purchase legitimate and directed the AO to allow the deduction.

Issue 3 - Disallowance of interest expenditure claimed by the assessee:
The controversy involves disallowance of interest payments of Rs. 64,444 and Rs. 1,16,130 claimed by the assessee for previous years. The AO disallowed these amounts due to accounting system discrepancies. However, the Tribunal noted a resolution by the board of directors regarding interest payments during loss periods. Considering this, the Tribunal directed the AO to allow the deductions for the interest expenditure in the year under consideration.

Issue 4 - Disallowance of miscellaneous expenses:
A disallowance of Rs. 5,000 from miscellaneous expenses was confirmed by the CIT(A) due to incomplete details. As the assessee did not provide further information, the Tribunal upheld the disallowance.

Issue 5 - Disallowance of travelling expenses:
A disallowance of Rs. 6,000 from travelling expenses was confirmed by the CIT(A) for lack of complete details. As no additional information was presented during the hearing, the Tribunal found no reason to overturn the decision.

In conclusion, the Tribunal partially allowed the appeal, directing the AO to allow the legitimate deductions for the expenses in question, except for the disallowances of miscellaneous and travelling expenses due to insufficient details provided by the assessee.