Assessable value deductions require clear proof of rent, depreciation figures, and pre-announced quantity discounts.

Deduction from assessable value was denied for rent of a duty-paid godown because the record did not prove that the rent was already embedded in factory rent, and separate rented space for the godown had been verified. Depreciation on bottles was sustained on the basis of the 1993-94 figures because the assessee failed to produce 1994-95 figures, and the burden to establish the deduction remained on the assessee. Quantity discount was rejected because the alleged scheme was not shown to have been pre-announced to dealers or supported by reliable trade evidence. The commentary states that deductions from assessable value must be proved by clear evidence and lawful entitlement.

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Issues: (i) whether rent attributable to the duty-paid godown was an allowable deduction while determining assessable value; (ii) whether depreciation on bottles had to be computed on the basis of the figures for 1994-95 instead of 1993-94; (iii) whether quantity discount allegedly given in kind was deductible from the wholesale price.

Issue (i): Whether rent attributable to the duty-paid godown was an allowable deduction while determining assessable value.

Analysis: The deduction was claimed on the footing that the godown formed part of the factory and that rent for the godown was already included in the factory rent. The record did not show any evidence that the godown rent was embedded in the factory rent. The authority below had found, on verified facts, that separate area had been taken on rent for the factory and the godown, and had worked out a proportionate rent for the godown. Maintenance cost, including rent of the duty-paid godown, was not a permissible deduction for arriving at assessable value.

Conclusion: The disallowance of deduction on account of rent of the duty-paid godown was upheld, against the assessee.

Issue (ii): Whether depreciation on bottles had to be computed on the basis of the figures for 1994-95 instead of 1993-94.

Analysis: The assessee did not produce the figures for 1994-95 at any stage. The burden to establish entitlement to the deduction lay on the assessee. In the absence of the relevant figures, the department proceeded on the figures furnished earlier by the assessee for 1993-94 and allowed the deduction on that basis.

Conclusion: The computation based on the available 1993-94 figures was upheld, against the assessee.

Issue (iii): Whether quantity discount allegedly given in kind was deductible from the wholesale price.

Analysis: The alleged discount scheme was not shown to have been made known to dealers in advance. The pamphlet relied upon was undated, not addressed to any dealer, and did not establish a valid pre-announced discount scheme. No invoice, price list, declaration, or other reliable evidence proved that the discount was actually allowed in the course of trade in the manner required for deduction.

Conclusion: The claim for quantity discount was rightly rejected, against the assessee.

Final Conclusion: No interference was warranted with the order determining assessable value by disallowing the contested deductions, and the appeal failed in full.

Ratio Decidendi: A deduction from assessable value must be supported by clear evidence that the claimed expenditure or discount is actually and lawfully deductible, and the burden to prove entitlement to such deduction lies on the assessee.

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