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TMI Blog2004 (1) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... 60" 5. It was submitted before the learned CIT(A) that amount of Rs. 1,20,649 out of Rs. 2,81,132 relating to bonus payable was paid by the assessee before the due date for filing of the return under s. 139(1) of the Act and, therefore, no disallowance should be made to this extent. The assessee also submitted that evidence regarding payment of Rs. 1,20,649 was filed during the course of assessment proceedings and, therefore, there was no justification even to disallow this amount. 6. So far as disallowance of Rs. 9,86,628 was concerned, the assessee submitted following details: S. No. Month Employees' contribution(Rs.) Employer's contribution(Rs.) Total(Rs.) Amount deposited(Rs.) Date of deposit 1. Feb. 88 55,258.80 1,22,732.35 1,77,991.15 1,77,962 21.3.88 2. Apr. 88 46,137.05 1,01,334.60 1,47,471.65 1,46,935 21.5.88 3. May 88 45,838.80 1,03,010.35 1,48,849.15 1,49,365 21.6.88 4. Dec. 88 37,205.30 82,600.20 1,19,805.50 1,19,770 21.1.89 5. Jan. 89 40,488.85 89,815.20 13,0,304.05 1,30,304 21.2.89 6. Feb. 89 41,067.50 91,261.50 1,32,329.00 1,32,329 21.3.89 7. Mar. 89 40,341.15 89,536.85 1,29,878.00 1,29,878 21.4.89 3,06,337.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 199 (Mad) (2) CIT vs. Trehan Enterprises (2001) 168 CTR (J&K) 274 : (2001) 248 ITR 333 (J&K) 9. The learned Departmental Representative, on the other hand, supported the order of the learned CIT(A). 10. We have carefully considered the entire material on record. In the Board's Circular No. 669, dt.25th Oct., 1993, after making reference to the earlier Circular No. 581, dt. 28th Sept., 1990, it has been clarified that if the sums referred in the first proviso to s. 43B had in fact been paid on or before due dates mentioned therein, but evidence therefor had been omitted to be furnished along with return, then the AO can entertain applications under s. 154 of the Act for rectification of intimations under s. 143(1)(a) or order under s. 143(3) of the Act, as the case may be, and decide the case on merits. 11. In view of the above circular, if the evidence was filed subsequently, i.e., during the assessment proceedings but if the payments were made before due date, then the assessee is entitled for deduction because furnishing of evidence is only a procedural aspect. 12. In view of the above, the AO is directed to verify the facts and allow the claim of the assessee in the light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the employees have not at all participated." 18. In our view, therefore, the issue stands covered by the above decision of the Tribunal in favour of the assessee. Hence, ground No. 3 is allowed partly in favour of the assessee. Ground No. 4: 19. Ground No. 4 is directed against the sustenance of disallowance of prior period expenses of Rs. 1,32,759 out of adjustments relating to earlier years amounting to Rs. 17,46,023. 20. The learned CIT(A) has considered the issue in paras 23 and 24 of his order. He has rejected the plea of the assessee by observing that in the year under appeal nothing was brought on record to justify that the prior period expenses had crystallized during the accounting year relevant for the assessment year under consideration. 21. Before us, it was submitted by the learned counsel for the assessee that the issue stands covered in favour of the assessee by the order of the Tribunal in the case of the company. In this regard, our attention was invited to the decision of the Tribunal 'E' Bench,Delhi, in the case of M/s Escorts Ltd. for asst. yr. 1982-83. In para 25.2 of the order of the Tribunal 'E' Bench,Delhi, dt.16th Dec., 1991, rendered in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company through banners in the cricket stadium and other sports events, and, therefore, are in the nature of revenue expenses which were incurred for carrying out business of the assessee-company, and the same are to be allowed. 25. The learned CIT(A) has considered the issue in paras 25 to 29 of his order and he has confirmed the disallowance to the extent of Rs. 76,625 by observing as under: "29. Regarding the amount of Rs. 21,500 spent on permanent seat allocation in the stadium, amount of Rs. 5,000 spent on new year celebration, amount of Rs. 7,125 paid to electricity board, Rs. 25,000 spent on advertisement on account of construction of public school for the children of policemen and Rs. 18,000 spent on purchase of tickets for the show at Nehru Stadium, I hold that no justification has been given in support of their allowability as advertisement expenses under s. 37(3) of the IT Act. Hence, addition to the extent of Rs. 76,6257 is hereby confirmed." 26. After considering the nature and details of the expenditure, we find that the learned CIT(A) was fully justified in rejecting the claim of the assessee on the grounds mentioned in para 29 of his order reproduced above. We, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise also, since the learned CIT(A) had restored the matter to the AO, no grievance is caused to the assessee. In view of the above, this ground is rejected. 33. In the result, assessee's appeal is partly allowed. ITA No. 7594/De/1992: Ground No. 1: 34. This ground is directed against deletion of disallowance of Rs. 35,917 being premium on keyman insurance policy. 35. The learned CIT(A) had decided the issue by following the orders of the earlier years in the case of the assessee and also by following the order of the Hon'ble jurisdictional High Court in the case of CIT vs. Bharat Ram Charat Ram (P) Ltd. (1985) 47 CTR (Del) 5 : (1986) 157 ITR 109 (Del). Thus, this ground is covered in favour of the assessee by the earlier orders and also by the order of the Hon'ble jurisdictional High Court referred to above. We, therefore, uphold the view taken by the learned CIT(A). Ground rejected. Ground No. 2: 36. This ground challenges the direction of the learned CIT(A) given to the AO to recompute the disallowance under r. 6D of the IT Rules by excluding the expenditure on local conveyance, telephone and telex, and by considering all the journeys undertaken by an employee in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g contrary has been pointed out by the learned Departmental Representative. Hence, we decide this ground accordingly." 39. The learned counsel for the assessee submitted that the issue has been recently considered by the Hon'ble Calcutta High Court in the case of CIT vs. General Electric Co. India Ltd. (2002) 175 CTR (Cal) 1 : (2002) 255 ITR 22 (Cal) and, therefore, in view of the latest decision, the issue should be decided in favour of the assessee, and the direction of the learned CIT(A) should be upheld. 40. We have carefully considered the issue. On perusal of the relevant para at p. 4 of the assessment order, it is found that he has taken disallowable amount at Rs. 2,48,605. The AO has not given the details of expenses per employee or details of travelling allowances or hotel expenses and other allowances. The learned CIT(A) has simply followed the order of his predecessor, for asst. yr. 1988-89 and has also placed reliance on the order of Tribunal in the case of Bharat Commerce & Industries. The appellate order dt.21st Feb., 1992, reference to which has been made in para 5 of his order, has not been filed before us. 41. The learned Departmental Representative has placed r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts earlier decision in the case of R.K. Swami Advertising Associates (P) Ltd. vs. CIT (1998) 147 CTR (Mad) 332 : (1996) 220 ITR 507 (Mad). 45. So far as the decision in the case of CIT vs. General Electric Co. India Ltd. is concerned, the Hon'ble Calcutta High Court has considered the issue relating to clubbing of journey and held that the words "aggregate of the amounts" mentioned in r. 6D of the IT Rules refers to the aggregate for the assessment year and not to a particular trip and if the expenditure was within the limit of aggregate, then it is a matter as to what a particular employee spent on one travel. 46. In view of the above decisions, the facts of the present matter have to be examined afresh by the AO relating to journeys undertaken by the employees. Hence, we consider it proper to set aside the directions of the learned CIT(A) on this point and restore the matter to the AO for deciding the same after examining the details of expenditure and details of journeys undertaken by the employees afresh, and to work out the disallowance as per rule and in the light of our observations made above. 47. For statistical purposes, the ground is decided accordingly. Ground No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this issue and reject this ground of the Revenue. Ground No. 5: 56. This ground is directed against allowing of deduction of Rs. 6,56,671 being cost of construction of scoreboard installed at Nahar Singh Stadium and sum of Rs. 39,400 being professional fee incurred in this regard. 57. The learned CIT(A) had restored this issue to the file of the AO for deciding the issue afresh. The relevant observations of the learned CIT(A) in this regard are contained in para 27 of his order which is as under: "27. I have carefully considered the facts of the case, the assessment order and contentions of the appellant's learned counsel. In view of the judgments relied upon by the appellant's learned counsel the expenditure on cost of construction of score board could not be considered allowable under s. 37(3) of the IT Act provided it was proved that the same was used for advertisement purposes by the appellant itself. Appellant has a number of sister concerns under the Escorts group of companies. The fact of advertisement facility, if any, available on the scored board is being used by the appellant (Escorts Tractors Ltd.) only and not by other sister concerns have to be ascertained. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him. Hence, this ground of the Revenue stands rejected. Ground No. 7: 64. This ground is directed against deleting the disallowance of Rs. 1,05,654 made by the AO on account of unverifiable nature of the claim. The learned CIT(A) has considered the issue in para 36 of his order. He had deleted the disallowance by reversing the findings of the AO who treated the expenditure as capital in nature. 65. We have considered the entire material on record. The assessee has given details of expenditure on p. 13 of the paper book at item No. 6, according to which, for dismantling the existing flooring of the building, etc. and for re-flooring the same, an amount of Rs. 1,05,654 was paid to Harnam Singh & Co. This expenditure is verifiable and in our considered opinion, the same was only for smooth running of the business. Thus, on this issue also, we uphold the findings of the learned CIT(A). Ground No. 7 is rejected. Ground No. 8: 66. This ground is directed against the deletion of disallowance of Rs. 2.5 lakhs representing advance made to sister concern for development of the product. 67. The learned CIT(A) has considered the issue in earlier year orders and has deleted the disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer fee. 73. The learned CIT(A) has considered this issue in paras 38 to 40 of his order and directed the AO to allow the claim of the assessee. 74. The learned Departmental Representative has supported the order of the AO. On the other hand, the learned counsel for the assessee has placed reliance on the order of the learned CIT(A). He also made reference to the following decisions: 1. Goodyear India Ltd. vs. ITO (2000) 68 TTJ (Del)(TM) 300 : (2000) 73 ITD 189 (Del)(TM) 2. CIT vs. Goodyear India Ltd. (2000) 161 CTR (Del) 359 : (2000) 243 ITR 239 (Del) 3. Wellman Incandescent India Ltd. vs. Dy. CIT (1997) 57 TTJ (Cal) 562 : (1995) 55 ITD 338 (Cal) 4. CIT vs. Kirloskar Tractors Ltd. (1998) 148 CTR (Bom) 121 : (1998) 231 ITR 849 (Bom) 5. CIT vs. Jyoti Electric Motors Ltd. (2002) 173 CTR (Guj) 20 : (2002) 255 ITR 345 (Guj) 75. We have considered the text of letter dt.23rd June, 1992, and also agreement. These documents are available at pp. 21 to 32 and 33 to 38 of the paper book. It may be pointed out that there is no dispute that the expenditure was for improving the technology. The assessee was engaged in the manufacturing activity of the tractors and in view of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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