9911796707
TMI Blog1989 (1) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... r by rail transport and three consignments are stated to have been brought by motor trucks. The ITO while examining the assessee's case for the asst. yr. 1980-81 the accounting period for which ended on 31st Mach, 1980, noticed that the following consignment purport to have been received by motor Trucks: (i) 43.360 M.Ts. value Rs. 42,188.05 date of receipt11th April, 1979. (ii) 161.660 M.T.s. value Rs. 1,36,274.83 received on25th May, 1979. (iii) 111.460 M.T.s. value Rs. 99,698.82 received on20th July, 1979. Another five consignments were claimed to have been received by rail and according to the assessee the entire quantity of goods were refined and was thereafter sold. The assessee inter alia, sold refined sulphur amounting to 428.840 M.Ts. of the Value of Rs. 6,70, 524.28 to parties situate at far off places like Thana, Baroda, Bombay Nagda and Coimbatore. The ITO found the vouchers in respect of transport of goods fromBombayto Aghwanpur to be suspicious for the following reasons: "(i) The vouchers of M/s Chandu Roadways are in fact photo copies in which the rate of freight and total freight is written with ball pen. (ii) From the vouchers of Shree Ram Roadways, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually received at Aghwanpur and was not refined. 3. The assessee had claimed the benefit of s. 80HH which has been declined on the ground that the transport vouchers in respect of the aforesaid transport of goods were not genuine, and therefore, the auditor's report furnished in support of the claim under s. 80HH was incorrect. The assessee also claimed extra shift allowance which was declined on the ground that no details were furnished. 4. The assessee claimed to have paid a sum of Rs. 12,817 to Smt. Kamlesh Gupta wife of a partner Sh. Ramesh Gupta. The ITO disallowed the same on the ground that formerly no interest was paid and in this year a sum of Rs. 30,000 was transferred from the account of Smt. Kamlesh Gupta to shri Ramesh Gupta's land and building account. The ITO considered the claim of interest to be not genuine. 5. On28th March, 1983that is three days before the time prescribed for the completion of assessment for assessment for asst. yr. 1980-81, was to expire, the assessee filed a revised return. In this return, the income originally returned was enhanced by a sum of Rs. 750 only by adding back an expenditure on account of fees paid to the assessee's tax co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trucks is duly recorded in the stock register of the assessee which has been checked by officials of Industries Department of the District. He therefore, deleted the addition of Rs. 1,87,923 as well as of the proportionate manufacturing expense of Rs. 41,892. 8. Regarding the interest paid to Smt. Kamlesh Gupta the learned CIT(A) found that the mere fact that interest was not charged in the earlier years was no reason to deny the claim for this year. He found that the interest was actually paid and tax was deducted at source and that it was also admitted that funds belonging to Smt. Kamlesh Gupta were utilised by the assessee. He, however, found that interest @ 18 per cent was excessive, Therefore, taking recourse to s. 40A(2), he allowed interest @ 15 per cent receding the disallowance to Rs. 2136 only. 9. Regarding the claim of extra shift allowance, the learned CIT(A) held that the necessary details had been filed along with the return itself and on verification he found those details to be correct. He, therefore, directed the ITO to allow extra shift allowance to the assessee. 10. Regarding the claim of relief under s. 80HH, the learned CIT(A) held that the law merely req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the cost price of raw sulphur. Thus what he intended was that raw sulphur was sold atBombaywithout any processing at the same price at which the assessee sold refined sulphur, a proposition for which there was no material to support. Since this proposition had no basis whatsoever, the learned IAC discarded it and adopted another basis that is to disallow the transport and manufacturing expenses. It may be true that the Bombay Transporters were not available when a ITO's Inspector went there and made enquiries with the help of the local officials but that could not be a ground for rejecting the expenditure claimed by the assessee. Admittedly, the assessee was operating atBombaythrough a clearing and commission agent namely M/s T. Doongersey. The inspector did not contact the said commission agent. It is that commission agent who arranged the transport of goods to Aghwanpur and, therefore, for the some reason those transporters are not available, the assessee cannot be held responsible. It is to be noted that the ITO has not made out a case that the transport charges claimed by the assessee are excessive. He has also not made any enquires from the appropriate sales tax check-post o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HH of the Act. Under that section, one of the various conditions to be fulfilled for getting the relief is that the accounts of the industrial undertaking should have been audited by an Accountant and the assessee should furnish a report of such audit in the prescribed form duly signed and verified by such Accountant. The ITO has observed that the certificate given by the auditors that the assessee's books of accounts give a true and fair view of assessee's business is incorrect in view of the disallowance of expenditure as discussed above. The learned CIT(A) held that what was required was that the accounts should be audited and a certificate of the auditor should be furnished by the assessee along with the return and that this was sufficient for the allowance of this relief if the other conditions were fulfilled. We agree with that view and even otherwise since the disallowance has been deleted, the ITO's contention does not hold ground Therefore, this contention of the Revenue shall fail. 14. Lastly the Revenue challenges the allowance of interest to the extent of Rs. 10,681 to Smt. Kamlesh Gupta. The learned CIT(A) has found that the said Smt. Kamlesh Gupta had a deposit with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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