9911796707
TMI Blog1998 (8) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... at Okhla Industrial Area Phase-II,New Delhimaintains its bank account with M/s Indian Bank, Defence Colony Branch. One Mr. Rawat, an employee of the company is stated to have carried Rs. 30,000 in his car to be deposited in the bank. On the way the amount was stolen when the employee had to stop the car in order to save a child who came before it. The theft came to be noted when the amount was to be deposited in the bank. A FIR was duly lodged with the police. The police was also reminded of the complaint filed with them. The AO did not believe the assessee s version on the ground that there was no evidence to show as to the purpose for which the money was carried by Mr. Rawat. Secondly that the police had not closed the complaint in the year under appeal because of which it could not be said that the money had become irrecoverable. Thirdly, it was not proved that the loss was incurred in the course of business. Reliance was placed on the decision of Madhya Pradesh High Court in the case of CIT vs. Durga Jewellers (1988) 68 CTR (MP) 5 : (1988) 172 ITR 134 (MP). The learned CIT(A) on the other hand, allowed the claim after following the decision in CIT vs. Sarya Sugar Mills (P) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the light of the decision of the Hon ble Supreme Court in the case of Allied Motors (P) Ltd. vs. CIT (1997) 139 CTR (SC) 364 : (1997) 224 ITR 677 (SC). In this connection we would however, mention that while the AO did not entertain the claim of the assessee on the ground that the same was not debited to the P L a/c and that a necessary challans in respect of the payments were not filed along with the return, the learned CIT(A) allowed the relief to the extent the same was deposited by the assessee which was to the tune of Rs. 25,001. Thus it is a relief in respect of an amount of Rs. 25,001 which is being contested by the Department. As mentioned earlier since the payment has been made by the assessee in view of the decision of the Hon ble Supreme Court in the case of Allied Motors (P) Ltd. we would uphold the order of the learned CIT(A) on the issue. This is also for the reason that no material was placed before us to controvert the finding of the learned CIT(A) in this regard. 6. Third ground of appeal relates to relief of Rs. 60,000 allowed on account of research and development expenses. The assessee has also contested the confirmation of addition of Rs. 61,020 on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Departmental Representative and have also gone through the submissions made by the assessee before the learned CIT(A). On p. 4 of the paper book it was mentioned that M/s Feed Back Management Services conducted the market survey on behalf of the assessee for one of its products namely coolants. As regards PUR Accessories it was pointed out that the same was claimed in respect of the staff support and registration of trade marks. The payment to S.K. Kapoor at Rs. 25,030 was for the services rendered for development of anti-freeze coolants. In support the details on research and development were filed in the paper book. These include the debit notes and the details in respect of the expenses claimed at Rs. 1,38,128. On going through p. 15 of the paper book it is found that various expenses as claimed relate to search and development as well staff support provided by the third party. However, there is no other material available in the paper book in support of the fact that the expenses incurred on research and development related to the product connected with the assessee s business or otherwise. As per order of the AO, the assessee is engaged in manufacture and producti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot shown that the same was for business purposes. Another sum of Rs. 3,50,000 was received from Overseas Services on which again no interest was paid. Rs. 3 lakhs was paid from Indian Bank overdraft account on which interest paid was to be disallowed. Similar was the case in respect of Rs. 1 lakh paid from Indian Bank overdraft account. Further, in respect of Rs. 3 lakhs transferred from the consolidated overseas services which were fund of the assessee no interest was to be disallowed. 10. The aforesaid finding of the learned CIT(A) was not controverted by the learned Departmental Representative. In this context, we find that while the AO had proceeded to disallow interest on general discussion, the learned CIT(A) linked the specific advances to the specific purposes for which they were given. The nexus were also established with the interest-free funds or interest-bearing funds. The finding of the learned CIT(A) being specific and there being no material to controvert the same, we would uphold the order of the learned CIT(A) on the issue. 11. Coming to the assessee s appeal in ITA No. 64/Del/1992 the first ground relates to loss on chit of Rs. 66,947. The AO disallowed the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertain to cold drinks, lunch meal, dinners club, hotels, coffee, sugar, tea, etc. The expenses have been incurred even on the staff of the assessee. Considering the major part of the expenses incurred on coffee, cold drinks, milk, etc. we would restrict the disallowance to Rs. 50,000 and allow a relief of Rs. 10,000 to the assessee. 14. The next ground of appeal relates to disallowance of Rs. 56,730 on account of repair and maintenance expenses. The disallowance has been made by the AO treating the expenses as of capital nature which line of argument has been confirmed by the learned CIT(A). 15. In this context we find that the assessee claimed a sum of Rs. 2,80,714 under the head "repair and maintenance expenses". These are stated to include expenses of capital nature as listed by the AO on p. 14 of his order. The expenses as mentioned were on purchase of MS tubes, power cables, radiator, pressure pipes, etc. After discussing the issue at length the AO made an addition of Rs. 1,03,830. The learned CIT(A) while allowing the relief on account of other expenses upheld the disallowance to the tune of Rs. 56,730. Reference made to the paper book shows that the assessee has filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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