2000 (6) TMI 7

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..... e-company is engaged in the business of manufacturing and sale of cranes, gas generators, etc. As per the tax audit report, disallowance was worked out at Rs. 1,52,372. The Assessing Officer in the course of verification of the details, found that the expenses incurred by the assessee in the course of travelling had not been considered for the purposes of disallowance. As per the details available on the record, the total of other expenses of Rs. 1,56,374 was disallowed in addition to the disallowances made by the assessee of Rs. 1,52,372. The matter was carried in appeal. The appellate authority came to the conclusion that rule 6D had no application to the expenses incurred by the assessee on account of conveyance and the calls made. The a .....

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..... s been laid down that the expression "hotel expenses" is specifically mentioned within parenthesis both in section 37(3) and rule 6D(2) and, therefore, the word "etc." mentioned in the marginal note along with the words "expenditure in connection with travelling" does not mean that the rule provides for expenditure on travel only. In other words, it was urged on behalf of the Department that the word "etc." in section 37(3) read with rule 6D clearly refers to conveyance and other expenses which are required to be disallowed subject to the ceiling prescribed in the said rule. We do not find any merit in the said contentions advanced on behalf of the Department. In the case of Inaroo Limited [19931 204 ITR 312 (Bom), the facts were as follo .....

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..... is case. In the case of CIT v. Chemet [1999] 240 ITR 624 (Bom), the facts were as follows. The assessee was engaged in the business as commission agents and brokers for chemicals and dyes. The assessee claimed deduction on account of miscellaneous expenses, local and other conveyance expenses. The Assessing Officer disallowed the same. The Assessing Officer included the said expenses incurred by the assessee in the computation under rule 6D of the Rules. The matter was carried in appeal. The appellate authority accepted the contention of the assessee and directed the Assessing Officer to take into account only the total expenses for the purposes of applying rule 6D(2) excluding expenses of conveyance and miscellaneous expenses. The appeal .....

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