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TMI Blog1989 (10) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor-employees of the company. It is also stated that the CIT (A) has erred in not appreciating the submissions of the appellant that even if s. 40A(5) applied, the limit to be applied for the Director-employee was Rs. 72,000 in terms of the proviso to s. 40A(5). 3. We have heard both the parties. The issue is not res integra. It already stands covered in favour of the assessee by an earlier order of the Tribunal, Delhi Bench 'A' in ITA No. 2322/Del/85, dt.16th June, 1987, relating to asst. yr. 1981-82 in the case of the assessee itself, where it has been held that under proviso to s. 40A(5) the limit to be applied for the Director-employee shall be Rs. 72,000. Since the issue is covered in favour of the assessee by the above order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encashed by the persons concerned and, as such there was no remission or cessation o f liability and, therefore, these amounts could not be taxed under s. 41(1) of the IT Act. The Assessing Officer did not accept the same and taxed these liabilities under s. 41(1) of the Act. The CIT has upheld the orders of the Assessing Officer. 6.1 The learned counsel for the assessee has submitted that similar unclaimed balances were taxed by the ITO under s. 41(1) for the asst. yr. 1980-81 and the Tribunal had deleted the same. He further relied on the judgment of Allahabad High Court reported in J.K. Synthetics Ltd. vs. O.S. Bajpai, ITO 1975 CTR (All) 256 : (1976) 105 ITR 864 (All) to show that the same could not be disallowed. The learned Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liabilities are unclaimed. The action on the part of the assessee in sending cheques to the parties concerned appears to be an eye-wash. Otherwise these cheques would have been sent either by registered post or intimations would have been sent to the parties concerned for collection of cheques in the office. One fact is established that these payments which have remained unclaimed for a long time, as nobody has come forward to claim the same, non-encashment of the cheques, if at all delivered to the persons concerned, does suggest that they are not interested in collecting the money. They, therefore, have remitted the liability by their conduct. In the given circumstances we uphold the order of the CIT (A) on this points. 8. The next grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. He further pointed out that the balance sheet was drawn up after the general body meeting had approved the same though after the last day of the accounting period and, therefore, the same related back to the last day of the accounting period of the immediately preceding assessment year and the first day of the accounting period relevant to the assessment year under appeal. According to him the words "provision for proposed dividends" was a misnomer and in reality it was the dividend payable to the shareholders which have been approved by the general body meeting. 10. The liabilities which are to be taken into consideration for the purpose of working out of the capital under s. 80J are on the first day of the accounting period relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking has been set up by the assessee. The ITO did not admit the claim under s. 80-I as according to him no separate accounts were maintained and joint accounts were there alongwith existing activities of the assessee company. It is because of this reasons that the claim was disallowed. The CIT(a) has upheld the same. 12.1 The learned counsel for the assessee stated before us that profits from the industrial undertaking for which claim under s. 80-I was made were segregated from the total profits. He further pointed out that accounts were duly audited and, therefore, the authorities below were not justified in not allowing the claim. 13. The learned Departmental Representative referring to sub-s. (7) of s. 80-I pointed out that rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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