9911796707
|
Home
Issues: Revenue's appeal on disallowance of hiring charges and polishing charges under s. 40A(2)(b); Assessee's appeal on bonus and sales-tax liability; Disallowance of Diwali gifts; Disallowance of travelling expenses for non-partners/employees; Disallowance of car and jeep expenses and depreciation.
The judgment by the Appellate Tribunal ITAT Jaipur involved the appeals of the parties concerning the assessment year 1989-90, addressing the disallowance of hiring charges and polishing charges under section 40A(2)(b) of the IT Act. The Revenue's appeal focused on challenging the deletion of disallowance of Rs. 1,17,039 for hiring charges and Rs. 61,600 for polishing charges by the CIT(A). The Assessing Officer disallowed the amounts based on the perceived excessive payments made by the assessee to its sister concern for truck/dumper hire and polishing services. The CIT(A), however, found the charges reasonable and in line with fair market value, leading to the deletion of the disallowances. Regarding hiring charges, the CIT(A) observed that the assessee paid and received charges at the same rate for vehicle hire, indicating reasonableness. The Tribunal agreed that the charges were not excessive, especially since the fair market value of the services was not assessed by the Assessing Officer. Therefore, the disallowance of hiring charges was rightly deleted. Similarly, for polishing charges, the CIT(A noted that the total production of stone did not necessarily correlate with polishing charges, as not all produced stone required polishing. The Tribunal upheld the deletion of the disallowance for polishing charges as well, emphasizing the lack of justification by the Assessing Officer. In the assessee's appeal, certain grounds were not pressed during the hearing, leading to their dismissal. The issues of bonus and sales-tax liability were addressed, with the Tribunal directing the Assessing Officer to consider allowing the payment of bonus made beyond the statutory period in the relevant assessment year. The outstanding sales-tax liability was to be verified for timely payment and allowed if within the specified period. Additionally, the Tribunal reduced the disallowance of Diwali gifts and confirmed the disallowance of certain travelling expenses and car/jeep expenses and depreciation, based on the nature of usage and previous disallowances. Overall, the Tribunal dismissed the Revenue's appeal while partially allowing the assessee's appeal, providing detailed reasoning for each issue raised and addressing the specific grounds of contention in the assessment. The judgment focused on the application of relevant provisions of the IT Act and fair assessment of expenses and liabilities incurred by the assessee during the assessment year.
|
