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TMI Blog2001 (10) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... exp. Rs. 12,528 (Asst. yr. 1990-91) 1/3rd of total expenditure of staff welfare as entertainment exp. Rs. 14,094 (Asst. yr. 1991-92) 2. As regards ground No. 1 in ITA No. 415/94 and ground No. 3 in ITA common in both the appeals, the brief facts of the case are that the assessee had claimed depreciation of Rs. 4,58,753 and Rs. 3,36,024 for asst. yr. 1990-91 and 1991-92. The AO did not allow the same as the assessee could not furnish details of assets prior to 21st Nov., 1988. There was a change of management and the new management has taken over the assets prior to 21st Nov., 1988, on estimate basis. Since the requisite particulars could not be furnished by the assessee, the depreciation was allowed only on the assets which was acquired after 21st Nov., 1988, and for which the assessee could furnish particulars. On appeal, the CIT(A) found that the appellant had not filed the detailed claim for grant of depreciation on building. Therefore, the CIT(A) opined that there was no error in the assessment order. Appellant can file a fresh claim for depreciation on the cost of building at any stage now in its income-tax proceedings. 3. The learned authorised representative submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed the same. On appeal, the CIT(A) held that these expenses were in respect of coal, fuel, legal and professional expenses, travelling expenses and advertisement expenses fright and forwarding expenses and salary payments pertaining to the earlier period. No evidence had been filed to show how the claims for these expenses had arisen in the year under consideration and were not provided for on mercantile basis in the year to which they pertained. Since the appellant failed to prove that the liability had arisen in the year under consideration, the disallowances were sustained by CIT(A). 8. The learned authorised representative explained that for the reasons of certain disputes in the company the management of the company was changed during the preceding financial year 1988-89 on 22nd Nov., 1988. The present persons took charge of management of the company. Old persons managing the affairs of the company did not come forward and did not even hand over the books of accounts of the company to the new management. 9. After taking over the charge of the company by the new management, number of claims were made against the company for non-payment against the supplies and services pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liabilities were known to the assessee only during the year under consideration. The new management has taken over from the old management on 22nd Nov., 1988, the books of accounts pertaining to the period prior to 21st Nov., 1988, which was received by the new management on 24th Dec., 1993, in pursuance of the Court's order, dt. 22nd July, 1993. The main reason for claiming the expenditure during the year under consideration was that the assessee was not aware of exact period to which these liabilities pertain. Now the assessee has received the books of accounts from the old management on 24th Dec., 1993. Therefore, in our opinion, this requires reconsideration by the AO on submission of correct expenditure for each item by the appellant. This issue is restored back to the file of AO with the direction that he should readjudicate upon this issue after obtaining complete details of the liabilities and of the year to which they pertain. If it is proved that the liability pertains to the year under appeal or it was quantified/ascertain during the year under consideration, the claim of the appellant may be considered as per provisions of law. 13. Ground No. 2(b) relates to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s confirmed the additional disallowance by saying that this is in respect of other expenses incurred by the persons during travel. However, the other expenses incurred during travel are Rs. 2,731 and not Rs. 2,891. Therefore, the addition made and confirmed by CIT(A) has no basis and cannot be sustained. (3) Further, r. 6D prescribes a limit for disallowance of certain expenditures exceeding certain limit. The provisions of r. 6D(2) read as under: "(2) The allowance in respect of expenditure incurred by an assessee in connection with travelling by an employee or any other person within India outside the headquarters of such employee or other person for the purpose of the business or profession of the assessee shall not exceed the aggregate of the amounts computed as hereunder: (a) in respect of travel by rail, road, waterway or air, the expenditure actually incurred; (b) in respect of any other expenditure (including hotel expenses or allowance paid) in connection with such travel, an amount calculated at the following rates for the period spent outside such headquarters." (4) We may further submit that the details of other expenditure of Rs. 2,731 mentioned in the Annexure to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the details of the articles of presentation costing more than Rs. 50, it was held by the CIT(A) that the following expenses are not allowable as reasons given in each article at pp. 3 and 4 of the order: Rs. (i) HMT Watch gifted to G.S. Kavadia (business connection with the donee is not stated) 4,500 (ii) Cash reimbursement to Sh. K.G. Toshniwal against gift and presentations (No evidence produced for the gifts made) 1,100 (iii) Cash reimbursement to T.C. Bafna for gift presented to SBBJ (No. evidence produced for the gift made) 487 (iv) Suitings and Sarees to bank and excise staff (No evidence regarding the purchase and details of presentation available 6,289 (v) Two safaree and one suiting gifted to various debtors and Government officers. No details regarding the purchase of these items and gift is available. 2,635 (vi) One dinner and tea set to bank party. No evidence in support of the same. 1,650 (vii) Three sarees given to various debtors. No details regarding the purchase of these items and gift is available 3,405 Therefore, we hold that the CIT(A) has rightly sustained the additions to the extent of Rs. 22,816 and Rs. 21,366 for the asst. yrs. 1990-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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