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TMI Blog1993 (7) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of branch at Darah Mines be allowed and added to the income of the assessee according to provisions of s. 43B. The learned CIT rejected the arguments on behalf of the assessee that in view of the decision of the Hon'ble Andhra Pradesh High Court in the case of Sinkakollu Subba Rao & Co. vs. Union of India & Ors. (1988) 71 CTR (AP) 34 : (1988) 173 ITR 708 (AP) the unpaid amount of sales-tax as on the last date of the accounting year should not be disallowed if it is paid within the time allowed under the relevant Sales-tax law, although after the previous year of the assessee. Since this Bench of the Tribunal has been consistently following this decision the ratio of which has since been followed by almost every High Court in the country ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Representative, on the other hand, vehemently argued that the learned CIT had mentioned that the balance amount of Rs. 1 lakh was not an ascertained liability but the assessee itself had shown it as provision for payment of bonus. In this way, according to the learned Departmental Representative, the case was not covered by ratio of decision of Sinkakollu Subba Rao & Co. and since it was only an unascertained liability, it could not be allowed as a deduction in view of the accepted principles of accountancy and in any case had to be disallowed under s. 43B. 5. We have carefully considered the submissions from both the sides. We find that Shri Jain has filed the details of payment of bonus to various persons on 13th May, 1985 and 2nd Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative that in the absence of establishing the fact that the expenditure was actually incurred by the assessee for purposes of its business, the Revenue authorities have been very reasonable in making a disallowance of Rs. 5,500 out of travelling expenses because it would not be justified to allow deduction only on the basis of presumption that the assessee must have incurred the expenditure for purposes of its own business if it had made payments to certain parties who were not its employees but had made entries in the books that it was for travelling for assessee's business. We, therefore, uphold the view taken by lower authorities and reject this ground. 8. The next objections contained in Ground Nos. 3 and 4 are regarding disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Ltd. vs. CIT (1966) 60 ITR 52 (SC). We may mention that according to us the main distinction between the two decisions of the Hon'ble Supreme Court is that where a new business is being set up and pre-production expenses are incurred for bringing into existence the business of the assessee, those expenses, including the interest incurred during the pre-production period on acquiring those assets is taken to be a capital expenditure and is capitalised as per the decision in the case of Challapalli Sugars Ltd.. On the other hand, where the assessee is a running business, as in the case before us, even if it takes loans for purchasing capital assets for carrying on its business, the loans taken for the purchase of those assets are taken for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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