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TMI Blog1994 (6) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to disallowance of Rs. 39,355 under s. 37(2A) on account of entertainment expenses. Connected with this ground is Ground No. 5 which relates to disallowance of Rs. 4,234 on account of presents given to foreign buyers. The learned counsel for the assessee submitted that for asst. yr. 1984-85 in ITA Nos. 4185 and 5255/Del/88 the expenditure on the purchase of presentation articles for foreign buyers has been allowed as a legitimate business expenditure and not being an expenditure of entertainment nature. For asst. yr. 1985-86 also in ITA Nos. 3064 and 3099/Del/89 the claim of the assessee has been allowed. We, for the sake of consistency, respectfully following the decision of the Tribunal in assessee's own case, delete the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the decision of the Tribunal in assessee's own case for asst. yr. 1984-85, delete the disallowance of Rs. 40,346. ITA No. 802/Del/1990: 6. We now take up the Departmental appeal. 7. First ground of appeal is relating to the computation of disallowance under s. 40A(5) relating to cash payments like HRA, reimbursement of medical expenses and club's subscription. Assessee's claim that cash allowance paid by the assessee are not to be considered as perquisites has been accepted by the CIT(A). The learned counsel for the assessee contended that the cash allowances paid to the employees/directors are to be treated as part of the salary and not perquisites as held by the Delhi High Court in the case of Instalment Supply P. Ltd. vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts made by the assessee to an employee by way of car allowance or HRA may not be regarded as perquisites but can be regarded as payment of salary as given in s. 17 and can, therefore, be taken into account for calculating the excess amount to be disallowed under s. 40A(5) in the assessment of the assessee. The decision of the CIT(A) being contrary to the decision of the Delhi High Court referred to above is reversed and the Assessing Officer is directed to calculate the disallowance in accordance with the decision of the Hon'ble Delhi High Court referred to above. 11. The next ground of appeal is relating to disallowance of Rs. 7,296 under s. 40A(3) on account of cash payments paid to the employees. The CIT(A) has deleted this addition by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture had been incurred to enable the assessee to find out the prospect and for augmenting the productivity of the profit making structure. The decision of the Gujarat High Court in the case of Sarabhai M. Chemicals Pvt. Ltd. vs. CIT (1981) 20 CTR (Guj) 68 : (1981) 127 ITR 74 (Guj) has been relied upon. The decision of the Chandigarh Bench of the Tribunal in the case of IAC vs. Vardhman Shipping Gen. Mills Ltd. (1989) 34 TTJ (Chd) 493 : (1989) 45 Taxman (Tax Mazazine) 52 has also been followed. We do not find any infirmity in the order of the CIT(A). We, therefore, decline to interfere. 13. Next ground of appeal is relating to allowance of depreciation on moulds at 40% as against 30% allowed by the Assessing Officer. The issue is covere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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