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1981 (3) TMI 114

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..... this figure, he had disallowed certain expenditure and added certain cash credits. There are in dispute before us. 2. The first point for decision is the expenditure of Rs. 32,870 claimed by the assessee in respect of Punalur arrack shop. This was to be of a large number of small items. Accordingly to the assessee, they were expenses incurred by them in arranging for the search of the illicit distilleries within the Range alloted by the Excise authorities. The presence of illicit distilleries within their Range was a competition for their products. So, the assessee was interested in putting out such distilleries. For this purpose, the assessee had incurred this expenditure ture in helping the Excise authorities in conducting such search .....

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..... espect of Thenmala Coupe, this figure should be adopted instead of the book figure. The CIT(A) did not deal with this point. 6. We are of opinion that the figure as per books should be adopted. Merely because a statement was found which showed the profit as on 31st May, 1973, it does not mean that the amount shown therein is the profit for the year. The account books had been seized and they had been scrutinised by the IT Dept. No entry in the books supports or corroborates the figure given in the statement. Obviously then the figure of Rs. 4,606 represents profit for some other period which may be more than 12 months. It would be more reasonable to go by the figures as per books. This ground is accepted. 7. In the next ground the ass .....

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..... ise and Police officials. There are also entries to show the expenses incurred by the assessee in connection with their visit to Trivandrum Secretariat. These entries make it amply clear that the books containing these entries were intended to record transactions as and when they take place and it was for the information of the assessee's partners alone. When entries are made in such books which are intended for the assessee's eyes alone, these entries record a correct transaction. If such books show receipt of loans, they have to be treated as loans only. There is no question of the assessee's money being passed off as loans in this case. The need for disguising the real nature of certain funds and showing them as loans from others is nece .....

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