Revisional interference for unsupported expenditure claims upheld where appellate verification was inadequate and record evidence was incomplete.

Revisional interference under section 22A(1) of the Karnataka Sales Tax Act was held proper where the appellate authority accepted an expenditure claim without adequate verification and in a manner prejudicial to the Revenue. The revisional authority could validly step in because the appellate order was contrary to the record. On the deduction issue, where the assessee's books were not fully supported by vouchers and receipts, restriction of the claim to 30 per cent of the expenditure was upheld as justified on the material before the authority. The revision order was sustained and no interference was warranted with the allowance made.

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Issues: (i) Whether the revisional authority had jurisdiction to invoke section 22A(1) of the Karnataka Sales Tax Act, 1957. (ii) Whether the restriction of deduction to 30 per cent of the expenditure was justified when the assessee's books of account were not fully supported by vouchers and receipts.

Issue (i): Whether the revisional authority had jurisdiction to invoke section 22A(1) of the Karnataka Sales Tax Act, 1957.

Analysis: The assessing authority had granted deduction only to the extent supported by vouchers and receipts, while the first appellate authority had accepted the claim on the basis of book entries without proper verification. The revisional authority examined the material and found that the appellate order was contrary to the record and prejudicial to the Revenue. In that situation, invocation of revisional power was warranted.

Conclusion: The exercise of revisional jurisdiction under section 22A(1) was valid.

Issue (ii): Whether the restriction of deduction to 30 per cent of the expenditure was justified when the assessee's books of account were not fully supported by vouchers and receipts.

Analysis: The revisional authority found that the claimed expenditure was not fully established by supporting vouchers and receipts. On that basis, it declined to accept the entire claim as actual expenditure and allowed only the deduction statutorily permissible on the material before it. The court found no error in that approach.

Conclusion: The restriction of deduction to 30 per cent was upheld.

Final Conclusion: The revision order was sustained and the assessee was not entitled to interference in respect of the deduction allowed by the revisional authority.

Ratio Decidendi: Where claimed expenditure in a tax assessment is not fully supported by vouchers and receipts, the revisional authority may validly interfere with an appellate order that accepts the claim without proper verification and may confine the allowance to the deduction legally supportable on the record.

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