9911796707
TMI Blog1997 (8) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ealised from the sale of coffee is not in dispute, as the coffee was, during the relevant years, required to be delivered to the statutory body, Coffee Board and the income was received from the Coffee Board The assessee had along with their returns filed the audited statement of accounts as the area of the land owned by them was more than 50 acres, and the filing of such audited account is mandatory under section 16(1)(a) of the Act. Notices were sent to the assessees under sections 16(4) and 17(2) of the Act. The Assessing Officer has noted that in response to that notice, the assessees had "produced accounts and explained them". The reason given by the Assessing Officer for disallowing a part of the amounts claimed under the heads cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them with regard to any particular item of expenditure or any voucher that the expenditure claimed was unreal, or was not incurred wholly and exclusively for the purpose of the land by the assessee. Learned counsel relied upon the decisions of the Supreme Court in the case of CIT v. Walchand and Co. Pvt. Ltd. [1967] 65 ITR 381 and the case of J.K. Woollen Manufacturers v. CIT [1969] 72 ITR 612. The principle stated in the earlier case was reiterated in the latter case. The question involved in those cases was the legality of the disallowance of a part of the remuneration paid by the employer to an employee on the ground that higher remuneration was not warranted by the business, the reality of the payment not being in question. It was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance applying best judgment cannot be questioned when there is some material to doubt the extent of expenses recorded in the books". It is clear from the order of the Tribunal that the Tribunal as also the Assessing Officer and the appellate authority had disallowed certain amounts which had been claimed as deduction because they doubted the extent of the expenditure recorded in the books. The complaint of the assessee is that the authorities have failed to point out the particular item of expenditure under the different heads as being unreal or not being wholly and exclusively applied for the purpose of the land. Learned counsel for the assessee submitted that it was incumbent on the part of the Assessing Officer to scrutinis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed under several heads are prima facie grossly excessive. It is open to the authorities to scrutinise the accounts and disallow a part of the amount claimed as expenditure, though the statutes require that the audited accounts be filed along with the returns by the assessees owning more than 50 acres, advisedly it has not been mandated, that such accounts shall be accepted without further verification. In the light of the submission made before us by learned counsel for the assessees that every payment made is supported by vouchers and that such vouchers have not been doubted even though there is no reference to vouchers in the order of the Assessing Officer we consider it just in the circumstances to direct the Agricultural Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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