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TMI Blog1979 (9) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... n tea and pan. 2. The Department by its appeal challenges the order of the AAC and the ground taken is that the learned AAC erred in deleting the addition of Rs. 18,900 (the break-up) of which is Rs. 10,358 interest, Rs. 7,132 capital expenditure and Rs.1,500 miscellaneous expenses). 3. The assessee is a Registered Firm deriving income from cotton business. The assessee paid amounts of Rs. 5,682 and Rs. 4,676 to Shri Mohan Lal and Lal Chand respectively, who are partners in the firm. It was submitted before the ITO that the interest has been paid to them in their individual capacity and the interest amount should be disallowed. However, the ITO did not accept the contention of the assessee and he disallowed the payment of interest. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea, pan expenses and the AAC gave a relief of Rs. 1,500 and restricted the disallowances to Rs. 796. 11. The assessee and the Department are aggrieved with the order of the AAC. Hence these appeals before the Tribunal. 12. We have heard the rival submissions and hold that the Departmental appeal on the point of interest of Rs. 10,358 has to be rejected, having regard to our earlier view taken in the case of the same assessee for the year 1974-75. 13. Regarding the second ground of the Departmental appeal that the AAC erred in giving a relief of Rs. 1,500, which was treated by the ITO as entertainment expenditure, we find no merit in the Departmental appeal, as on the point of entertainment, this Bench is consistently following the jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery and plant and therefore, the expenditure incurred was of an allowable nature. In other words, the Supreme Court did not hold that the expenditure incurred, though certain parts were replaced, new parts were also put in, the character of the machinery did not change, did not come under the heading "Casablanca expenditure". Accordingly we accept Shri Modi's contention that the lower authorities erred in holding that the expenditure of Rs. 9,951 is of a capital nature. We hereby delete the same. 15. Regarding the disallowance of 1/3rd of driver's salary i.e., Rs. 556, Shri Modi did not advance any arguments except stating that the car was used for the assessee's business and, therefore, it should be allowed in full. However, Shri Modi d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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