1982 (4) TMI 103

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..... d Truck No. MNS 5170, two cars No. MNS.-72 and BMF-6584 to Mahindra Family Trust for the amount of Rs. 10,605.88, Rs. 2,340.86 and Rs. 3,584.00 and the ITO did not accept the sale price and thereby made an ad hoc addition of Rs. 2,000 to the sale price of each vehicle, referred to above, on the ground that the sale price shown by the assessee is less than the market price of these vehicles, as the assessee failed to make satisfactory explanation to the enquiry that whether the sale price represented fair market value of these vehicles. Similarly, he made an addition of Rs. 1,620 out of director's travelling expenses on applying r. 6D of the IT Rules, 1962. The CIT(A) decided the appeal of the assessee as ex-parte and upheld the aforesaid ad .....

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..... sought adjournment. Therefore, there is no satisfactory explanation on the record for absence of the assessee on the date of hearing of the appeal. Hence we hold that the CIT (A) was justified in passing the ex-parte order and deciding the appeal on merits. 5. On merits, we are of the opinion that the assessee should succeed on the issue that whether the authorities below were justified in making the addition of Rs. 2,000 towards the travelling expenses of the directors of the company u/r 6D of the Rules. The reasons are that no doubt the assessee has made these sales to Mahindra Family Trust on the written down values at their respective sale prices and the assessee has claimed no loss on the sale of these vehicles and the books of acc .....

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..... for the application of r. 6D of the IT Rules. The reason is that the ITO has allowed deduction on the basis that the daily allowance as per r. 6D, was only Rs. 100 while according to the proviso to r. 6D where it says that if the journey is to metropolitan cities like Delhi, the allowance should be Rs. 150 in the case of the assessee. The proviso to r. 6D is applicable as the paper book, page 2 shows that the journey by the directors was to the metropolitan cities like Bombay, Calcutta Delhi, have to apply it and thereby hold that the claim of the assessee for travelling expenses of the Directors is just; hence allowable. In view of our above discussions and reasons thereto, we hold that the authorities below were not justified in makin .....

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