1981 (12) TMI 55 - AT - Income Tax

Summary

Issues:
1. Disallowance of expenses for Dealers and Suppliers mess expenses and Sale Promotion expenses.
2. Disallowance of general expenses for 'Tilak and shagun'.
3. Disallowance of interest claim payable to M/s. Buckau Wolf India Development Corporation.
4. Disallowance of depreciation and initial depreciation claimed on labour quarters.
5. Disallowance of gratuity claimed by the assessee.

Analysis:
1. The first issue pertains to the disallowance of expenses for Dealers and Suppliers mess expenses and Sale Promotion expenses. The Appellate Tribunal upheld the decision in favor of the revenue based on previous orders and rejected the appeal by the assessee. The Tribunal noted that the facts and circumstances were similar to another case involving the assessee.

2. The second issue involves the disallowance of general expenses for 'Tilak and shagun'. The Tribunal accepted the contention of the assessee based on consistent views of the Bench on this issue, overturning the decision of the lower authorities.

3. The third issue concerns the disallowance of interest claim payable to M/s. Buckau Wolf India Development Corporation. The Income Tax Officer disallowed the claim citing non-ascertainment and non-payment of the interest during the relevant year. The CIT (Appeals) partially disallowed the claim. However, the Tribunal, after considering relevant documents, accepted the assessee's contention based on the genuineness and accrual of the liability.

4. The fourth issue relates to the disallowance of depreciation and initial depreciation claimed on labour quarters purchased under a hire-purchase agreement. The Tribunal upheld the disallowance of depreciation and initial depreciation based on the ownership clause in the agreement. However, the alternative plea for deduction of rent payment was accepted by the Tribunal.

5. The fifth issue involves the disallowance of gratuity claimed by the assessee. The Tribunal accepted the claim of the assessee based on similar facts and submissions from previous cases. The Tribunal partly allowed the assessee's appeal on this ground.

In conclusion, the Appellate Tribunal partly allowed the assessee's appeal, overturning some disallowances while upholding others based on detailed analysis and consideration of relevant legal provisions and factual circumstances.