9911796707
TMI Blog1982 (1) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... Export inspection fee 27,050 3. Foreign travelling 60,833 4. Foreign Postage 10,967 5. Telephone Bills (Foreign) 189 6. Export expenses 1,205 7. Export shipping expenses 14,07,605 8. Export procurement expenses 2,907 9. Exchange difference 10,658 10. Export and staff expenses (est) 36,000 11. Export packing and forwarding 9,90,657 Out of the above items, the ITO rejected the assessee's claim in respect of the items listed at Sr. Nos. 2 and 4 to 11 whereas in respect of the first item, i.e. commission to foreign agent, he disallowed the assessee's claim in respect of Rs. 67,954 which was paid in India to M/s. Mangalji Bhimji of Bombay on the plea that it was paid in India whereas in respect of the third item. i.e. foreign travelling, the ITO disallowed the assessee's claim of weighted deduction in respect of Rs. 4,000 only, to which the assessee agreed. 3. When the matter was carried by the assessee before the CIT (Appeals), he confirmed the finding of the ITO in respect of each of the above stated eleven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the CIT (Appeals)'s order shows that the assessee's claim in respect of salaries was also there though not adjudicated by him specifically in his order. 5. We will be dealing with all the items raised by the assessee in its first ground of appeal in respect of which a chart has also been filed at pages 1 to 5 of the assessee's paperbook. In respect of all the items, the ld. counsel, submitted that in the light of Special Benches decision of the Tribunal Bombay Benches in the case of M/s. J. Hem Chand Co. ITA Nos. 3255 and 3330/76-77 dt. 17th June 1978 and on the basis of another Special Bench decision of the Tribunal (Delhi Benches) and the decision in the case of Eastman Industries, the assessee's total claim deserve to be allowed. The ld. Deptl. Rep., on the other hand, submitted that though he has instructions that the Special Bench decision in the case of J. Hem Chand Co. has not been accepted by the revenue but he submitted that, according to the same or otherwise, the assessee's claim in respect of all the items projected before us deserve to be rejected. 6. After taking into consideration the rival submissions, before we adjudicate the issue we would like to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorrect partially because the Special Bench has in para 33 of its order while dealing with 'L' Mark and licence fee and in para 30 of the same order dealing with 'certificate charges' adjudicated the issue against the assessee. The export inspection fee is same and identical as 'certificate charges' and for the very same reasons given by Special Bench in paras 30 and 33 of its order, we confirm the finding of the CIT (Appeals) rejecting the assessee's claim in respect of this item, Before we part with this issue, we would like to make on observation that the remark given against this item in the assessee's chart pertaining to ECGC was of no relevance as export inspection fee is quite different from ECGC. (c) Foreign postage Rs. 10,957 : In respect of foreign postage, the assessee in its chart observed that the ITO allowed a similar claim in respect of M/s. Eastman Industries. But if we peruse the Special Bench decision on this issue which is dealt in para 32 and finding of principle in earlier part of the said order, we are of the view that the assessee's claim in respect of foreign postage deserves to be accepted. (d) Telephone bills Rs. 189: On the basis of the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... association relating to export Rs. 3,292: The assessee deserves to succeed in respect of this item about its claim of weighted deduction on the basis of 100 % of the expenditure. (p) Export management and supervision charges Rs. 12,000 : Like salaries for the export business, the assessee's claim deserves to be accepted in this respect for 75 % of Rs. 12,000 i.e. the assessee would be entitled to weighted deduction in respect of Rs. 9,000. 7. Grounde Nos. 2 and 3 raised by the assessee in its appeal were also of general nature in respect of weighted deduction and the same shall be treated as disposed of in the light of our above finding given item-wise. 8. Grounds No. 4 in the assessee's appeal is in respect of disallowance of general expenses amounting to Rs. 13, 979 made out of the total sum of Rs. 60,988 spent of partner's travelling expenses. Perusal of record shows that the assessee was unable to file the details in respect of the said expenses and before us also the statement placed at page 5 of the assessee's compilation was filed but no bifurcation was available whatsoever about the assessee was fair enough to admit that these were on account of tips and there cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm. It is not so, the ITO disallowed the amounts of puja and charity and the payment of rent which was not found to be genuine as in the earlier years. He, therefore, disallowed the amounts of Rs. 1,256 and on the same reasons the CIT (Appeals) also confirmed the said disallowance. We, therefore, on the very same basis, confirm the same. The assessee thus fails on this ground of appeal. 12. Now that survives for our consideration is the assessee's appeal for 1975-76 in which the first ground is in respect of the action of the CIT (Appeals) who confirmed the disallowance of the following items: "(i) Entertainment Expenses Rs. 3,163 (ii) Leave with wages 2,960 (iii) Puja expenses 1,571 (iv) Interest on deposits covered in the cash flow 7,200 (v) Out of travelling expenses 8,500" 13. The ld. Counsel for the assessee did not press the assessee's claim in respect of item No. (iv) above, i.e., in interest on deposits covered in the cash flow and the same as such is rejected and in that regard the action of the CIT (Appeals) is confirmed. 14. In respect of (i) entertainment expenses, he submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are detailed in the very same para of the CIT (Appeals) order. After perusal of the details, the CIT (Appeals) found that the expenses claimed included following items : "(i) Entertainment Rs. 2,230 (ii) General expenses 2,320 (Rs. 750+1100+470)". 1,571 After taking into consideration all these expenses of disallowable nature, when we find that out of the total expenses of Rs.60,988, the ITO had disallowed a sum of Rs.15,488 the disallowance seems to be on little higher side. Adopting by and large the same method we restrict the disallowance of Rs.6,500 instead of Rs.8,500 which will meet the ends of justice. 18. The next ground is in respect of weighted deduction relating to following items : "(a) Export inspection fee Rs. 25,064 (b) Foreign postage 1,015" Out of the above said items, the assessee deserves to succeed only in respect of foreign postage as per Special Bench decision, referred to above, and as per the very same decision, the assessee fails in contention in rest of the items (a) and (c) to (g). We are not entering into detailed discussion on these issues, since we have de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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