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TMI Blog1998 (11) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... 03,650 made to the clubs. Further the Assessing Officer found that the auditors had pointed out that the amount of entertainment expenditure did not include expenditure on tea, coffee etc. to visitors at the office/factory premises of the assessee-company because the same was not ascertainable. The Assessing Officer requested the assessee-company to furnish details of such expenses. The assessee-company, however, did not file the details but made an estimate of Rs. 19,687 in this behalf. In these circumstances, the Id. Assessing Officer estimated the expenditure on tea, coffee etc. to the visitors and estimated the same at Rs. 5 lakhs. The total disallowance on account of entertainment expenses was, therefore, made for Rs. 16,87,399. 2. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1 lakh from Rs. 5 lakhs estimated by the Assessing Officer and the same should be sustained. 6. We have carefully considered the rival submissions. In the order for the assessment year 1987-88 the Tribunal took note of the fact that in the assessment orders for the assessment years 1985-86 and 1986-87 the disallowance had been made for sums of Rs. 19,687 and Rs. 19,588 only. On that basis the Tribunal reduced the disallowance sustained by the Id. Commissioner of Income-tax(A) at Rs. 50,000 to a sum of Rs. 30,000. We are not aware of the position obtaining in the assessment year 1988-89. Having regard to the past history of the case, we hold that it would reasonable to estimate the disallowance for the assessment year 1989-90 at Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment in the case of Sinclair Murray Co. (P.) Ltd. (supra) and Chowringhee Sales Bureau (P.) Ltd. vs Commissioner of Income-tax [1973] 87 ITR 542, reliance placed by the assessee on the Guidance Notes was not correct. He, therefore, rejected the assessee's grounds of appeal in this behalf. 9. During the course of hearing before us the assessee placed reliance on para 3.3 of "Guidance Note On Tax Audit under section 44AB of the Income-tax Act". This para 3.3 is as reproduced below : "In the Statement on Auditing Practices issued by the Institute the following note appears under the heading 'Sales' (Para 11.1 at page 55 of 3rd edition, 1983) 'Sales include sales of all products manufactured by the Company including byproducts. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce as to where in the books of account of the assessee sales tax was debited. The judgments of the Hon'ble Supreme Court were quite clear that sales-tax is to be treated as an integral part of the trading receipts of the assessee. 11. We have carefully considered the rival submissions. It is seen by us that the 'Guidance Note' relied upon by the Id. counsel of the assessee has been issued by the Institute of Chartered Accountants of India in relation to provisions of section 44AB of the Act. The Institute has also not taken note of the judgment of the Hon'ble Supreme Court in the case of Chowringhee Sales Bureau (P.) Ltd. (supra), Sinclair Murray Co. (P.) Ltd. (supra) and so on. It is seen that the Hon'ble Supreme Court have reiterated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income-tax [1979] 116 ITR 1. While the emphasis placed on the entries in the books of account for the purpose of whether the same should be subjected to tax audit or not may make some sense, it is difficult to accept the position that the computation of 'total turnover' for the purpose of substantive deduction from the total income, such as under section 80HHC should be a matter only of the entries made by an assessee in its books of account. We are, therefore, of the considered opinion that the Guidance Note (supra) relied upon by the Id. counsel of the assessee cannot be imported for the purpose of the concept of total turnover as envisaged in the provisions of section 80HHC. 12. In view of the discussions in the foregoing par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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