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TMI Blog1979 (2) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... e AAC found that the various items of expenditure included under this head were, by and large, in the nature of customary expenses in providing light refreshments to the business customers except for a sum of Rs. 2,297, being the payment to Diners Club India Pvt. Ltd. The AAC held that the said expenditure of Rs. 2,297 was in the nature of entertainment expenditure and hence hit by the provisions of s. 37(2B) of the Act. He, accordingly, restricted the disallowance to that figure and thereby allowed a relief of Rs. 1,703 (Rs. 4,000 minus Rs. 2,297). The contention of the Department before me is that even items of customary expenditure incurred in light refreshments given to the customers in the course of a business is classifiable as 'expenditure in the nature of entertainment' within the meaning of that expression in s. 37(2B) of the Act and in support of this contention reliance is placed on the decisions of the Allahabad High Court in Brij Raman Dass Sons vs. CIT (1), the Kerala High Court in Veeriah Reddiar(2), and the Punjab Haryana High Court in CIT vs. Gheru Lal Bal Chand (3). The learned counsel for the assessee has however sought to support the order of the AAC on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fresh evidence in the strict sense of the term. In so far as the so-called payment (of Rs, 1,190) to M/s. Jayshree Chemicals was concerned, it was submitted that it was merely a contra-entry and not an actual payment in respect of 'weighment'. On these facts, it was urged that the decision of the AAC was correct and should accordingly be upheld. 5. Turning first to the preliminary objection raised by the departmental Representative the order of the AAC shows that the ITO was present at the hearing. Hence, it must be presumed that the fresh evidence in the shape of the certificate from the Railways would have been put to him for rebuttal by the AAC. I am, therefore, unable to agree with the contention of the learned Departmental Representative that the provisions of R. 46A were violated by the AAC. However, even if this contention was to be accepted and the points at issue were to be decided without reference to the certificate in question, there does not appear to be any case for making a disallowance out of the 'Weighment Charges'. Turning to the first debit of Rs. 1,190 on 31st July, 1974, being the coolie charges incurred at Udaipur Railway Station, it is no doubt true that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f grinding charges, but was for the transportation of the ground rock phosphate. He also found that the said Shri Kuldip Singh was one of the lorry operators generally engaged by the Udaipur Branch for the carriage of its goods. He, therefore, held that there was no justification for disallowing this item either. 7. The contention of the learned Departmental Representative is that, by admitting the duplicate bills and the certificate from M/s. Mewar Minerals, the AAC had infringed the requirements of Rs. 46A. Without prejudice, it was submitted by him that, at least in so far as the payment to Shri Kuldip Singh was concerned, the disallowance should have been upheld since he did not have any fixed address. The learned counsel for the assessee, on his part, pointed out that the business in the purchase and grinding of rock phosphate was being carried out at the Udaipur Branch of the assessee both on its own account and on account of a constituent by the name of Anish Chemicals. It was also pointed out that excluding the payment to Shri Kuldip Singh which was actually in respect of transportation and not for grinding, the total grinding charges incurred during the year both on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of Udaipur Branch. This amount represents two payments made to Shri Kuldip Singh and the disallowance was made on the ground that the payments were supported only by 'self-vouchers' which did not indicate the address of the party. In deleting the said disallowance, the AAC relied mainly on the fact that the vouchers in question had been signed by the said Shri Kuldip Singh. The grievance of the Department is that, in the absence of Shri Kuldip Singh's address, there was no means of verifying whether the signature was actually his. The learned counsel in his reply however pointed out two factors which according to him, would prove the genuineness of the claim. He first of all pointed out that this was not the first year in which Shri Singh had been engaged by the Udaipur Branch for the transportation of its goods, and he had performed similar functions in the earlier years as well. He next stated that the transportation charges were being recovered from the constituent (M/s. Anish Chemicals) and the transportation charges account disclosed a very high margin of profit during the year as would be evident from the following date— Transportation and servicing c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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