9911796707
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Issues:
1. Disallowance of vehicle maintenance expenses 2. Disallowance of telephone expenses 3. Disallowance of interest paid to income-Department 4. Disallowance of interest paid to a partner 5. Disallowance of damages paid for late supply of equipment 6. Depreciation claim on factory building 7. Claim for rebate under s. 80G 1. The appeal involved various issues, one being the disallowance of Rs. 10,000 from vehicle maintenance expenses. The Tribunal considered the increased expenditure and reduced the disallowance to Rs. 7,000, deeming it reasonable and fair based on the facts presented. 2. Another issue was the disallowance of Rs. 7,960 from telephone expenses. The Tribunal found the disallowance excessive and restricted it to Rs. 3,000, citing an increase in business calls as the reason for the higher expenditure. 3. The disallowance of Rs. 1,208 paid to the income-Department as interest was upheld, as the claim for deduction was deemed untenable by the Tribunal. 4. The Tribunal also upheld the disallowance of Rs. 949 paid as interest to a partner, as it fell under the provisions of section 40(b) and did not warrant any interference. 5. A significant issue was the disallowance of Rs. 90,710 paid as damages for late equipment supply. The Tribunal disagreed with the CIT's view that these payments were for breach of agreement, instead siding with the assessee's argument that they were compensation for delays beyond the supplier's control. The Tribunal allowed the deduction, emphasizing that the payments were not penalties for breaching contractual obligations. 6. The claim for depreciation at 10% on a factory building was disputed, with the CIT rejecting it based on past depreciation rates. However, the Tribunal found that new material, including an approved valuer's report, warranted a fresh examination by the CIT, leading to the vacation of the CIT's finding on this issue. 7. Lastly, the claim for rebate under s. 80G was contested, with discrepancies noted between the ITO's rectification and the CIT's finding. The Tribunal directed the issue back to the CIT for verification and a revised finding, as the rectification had not been made as stated. In conclusion, the Tribunal partially allowed the appeal filed by the assessee, addressing each issue raised in detail and providing reasoned judgments on each matter.
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