1992 (5) TMI 57 - AT - Income Tax

Summary

Issues: Disallowance under section 43B, Disallowance of travelling allowance, Deletion of addition under Taxi Quota Excise Refund Account

Issue 1: Disallowance under section 43B
The appeal challenged the disallowance of Rs. 28,990 under section 43B, relating to sales tax payment timing. The CIT(A) ruled in favor of the assessee, citing precedents and amendments to section 43B by Finance Acts of 1987 and 1989. The Tribunal upheld the CIT(A)'s decision, emphasizing that if an assessee pays sales tax within 30 days from the end of the accounting year, it was not actually payable within the accounting year under the law. The Tribunal dismissed the Revenue's appeal based on established legal principles and precedents.

Issue 2: Disallowance of travelling allowance
The second issue involved the disallowance of Rs. 31,000 out of a total travelling allowance of Rs. 44,888. The Revenue contended that the CIT(A) did not adequately consider the nature of vouchers and the purpose of journeys. However, the CIT(A) found the expenses genuine and incurred for business purposes, especially related to the dealership of M/s Hindustan Motors Ltd. in Calcutta. The Tribunal, based on available material, upheld the CIT(A)'s decision and dismissed the Revenue's appeal on this ground.

Issue 3: Deletion of addition under Taxi Quota Excise Refund Account
The third issue involved the deletion of an addition of Rs. 64,151 made by the ITO under the head "Taxi Quota Excise Refund Account." The CIT(A) accepted the explanation provided by the assessee regarding the nature of the amount realized from customers. The Tribunal noted that the assessee acted as a conduit pipe for collection and refund of central excise, and the amount in question was collected as a security deposit. The Tribunal upheld the CIT(A)'s decision to delete the addition, emphasizing that the assessee was not responsible for the excise duty payment. The Tribunal dismissed the Revenue's appeal, concluding that the CIT(A)'s decision was based on factual and legal analysis, and the Supreme Court's decision cited by the Revenue was not applicable in this context.

In conclusion, the Tribunal dismissed the Revenue's appeal on all grounds, affirming the decisions of the CIT(A) based on legal interpretations, factual findings, and established precedents.