Examination of vouchers: expenses may be partially disallowed if records show prima facie excess, remand for re examination.

Authorities may scrutinise and disallow portions of claimed expenditure when amounts appear prima facie excessive, but audited accounts are not to be accepted blindly; where the assessee produces vouchers and supporting documents the tax authority must examine those records and identify specific items or payments regarded as not genuine or not wholly and exclusively for the purpose claimed, and may apply a percentage disallowance only if material supports doubt as to extent. The matter is remitted to the Agricultural Income-tax Officer for re-examination of deductions after due notice and inspection of produced vouchers; documents not earlier produced are not permitted now.

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Issues: Whether the Assessing Officer and appellate authorities were entitled to disallow portions of expenditure claimed by the assessee despite audited accounts being filed, without specifying particular vouchers or items as unreal, and whether the orders of the authorities should be set aside and the matter remanded for fresh assessment with examination of vouchers and records.

Analysis: The authorities may scrutinise and disallow parts of claimed expenditure when the amounts appear prima facie excessive, but blanket acceptance of audited accounts without verification is not mandated. When the assessee produces vouchers and supporting documents, the authority must examine those documents and, if challenged, identify specific items or payments regarded as not representing real transactions or not wholly and exclusively for the purpose of the land. A percentage disallowance may be permissible where there is material to doubt the extent of expenses, but if vouchers have been produced and retained, the claims require re-examination against those records; if vouchers were not retained, the assessee should be allowed to produce them for verification.

Conclusion: The orders of the Assessing Officer, the appellate authority and the Tribunal are set aside and the matter is remanded to the Agricultural Income-tax Officer to re-examine the deductions claimed by the assessee after due notice and examination of the vouchers and records produced; the assessee is not permitted to produce records which were not earlier produced before the authorities.

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