9911796707
TMI Blog1983 (8) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... h the passage of time and increase in prices, the assessee had, per force, to pay a higher amount. It was, therefore, claimed that the same should have been allowed. The departmental representative, on the other hand, submitted that there is no scope for interference in the orders of the AAC. After bearing both the parties, we are of the view that he disallowance of Rs. 2,206 was not justified because the assessee had incurred the expenditure, which had not been disputed by the revenue, with the passage of time, higher rates are demanded and the assessee has no option but to pay. We, therefore, see no reason to sustain this disallowance and, as such, the same is deleted. 3. The second disallowance of Rs. 2, 086 is on account of the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as worked out by the ITO at Rs. 10,322, Rs. 1240 and Rs. 1,350 respectively. The ITO was of the view that the assessee has under-stated the income from interest by not charging interest on the credit balances. These parties were not the relations of the partners of the firm. It is contended before me by the learned authorised Advocate, Shri Goyal, that the interest was not charged in view of the business expediency and that at the calculations of the ITO on the interest rate is erroneous. However, no other reasons were forwarded by Shri Goyal. It is not denied that interest has been charged from various parties with whom the appellant has business considerations. Thus, excluding the parties favourable to the assessee in determination of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyalty were debited in profit and loss account to the agreement entered with one Shri Sultan Singh Amilal. The payment of royalty was scrutinised by the ITO. Royalty was paid for use of land for five years ending on31st July, 1982. A sum of Rs. 6,755 was debited during the accounting period relevant to the assessment year under dispute. It is argued before the ITO that the land which was being used was not very suitable for digging and extracting the soil for manufacture of bricks. The ITO was of the view that, as the agreement was for five years 1/5th of Rs. 9,665 was the correct share of royalty in the account period under reference and added the balance of Rs. 7,724 in the trading account. It is claimed by the learned authorised advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the instant case. Five years is too small a period to confer that benefit. Another aspect of the matter is that, when the assessee had paid the amount for taking earth and the land turned out to be rocky, the expenditure could not be thrown out on the ground that he did not dig out earth, because, while entering into an agreement; the assessee could not anticipate that underneath the normal surface of earth, there will be rocks. We, therefore, uphold the order of the Commissioner (Appeals) in this regard. 8. The ITO added a sum of Rs. 12,022 on account of under- valuation of the closing stock at the rate of Rs. 3 per thousand. This was deleted by the Commissioner (Appeals) as follows: "7. The next contention is regarding the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d each item for the superior and inferior class of the bricks and only then applied different rates of cost of bricks manufactured per thousand as has been done by the appellant. A chart has been furnished showing the details of bricks and their cost worked out. I am inclined to agree with the learned authorised advocate that the valuation of stock worked out year after year by the appellant on the basis of cost price needs no disturbance. Addition of Rs. 12,022 made by the ITO is uncalled for and is deleted." It is contended before us that the Commissioner (Appeals) was not justified in disturbing the addition. The learned counsel for the assessee, on the other hand, submitted that the closing stock had been properly valued because there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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