Revenue appeals dismissed, assessee cross objections allowed. Disallowances upheld/deleted. Tribunal rules favor assessees.

The appeals of the revenue were dismissed, and the cross objections of the assessee were allowed. The disallowances of guest house expenses, gifts and presents, Employers P.F. Contribution, Employees P.F. Contribution, expenses for the issue of Bonds, and provision for contractual obligation were either deleted or upheld based on previous decisions and rulings. The Tribunal consistently ruled in favor of the assessee, citing removal of specific sections and lack of evidence to support disallowances.

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Issues involved: Appeal against two different orders of the ld. CIT(A) for assessment years 2003-04 & 2004-05, involving disallowance of guest house expenses, gifts and presents in business promotion expenses, Employers P.F. Contribution, Employees P.F. Contribution, expenses incurred for issue of Bonds, and provision for contractual obligation.

Assessment Year 2003-04:

1. Disallowance of Guest House Expenses:
- AO disallowed expenses not incurred wholly and exclusively for business.
- CIT(A) deleted disallowance citing removal of Section 37(4) u/s 1998-99.
- Tribunal upheld CIT(A)'s decision due to removal of Section 37(4).

2. Disallowance of Gifts and Presents:
- AO disallowed based on past disallowances.
- CIT(A) deleted citing omission of Rule 6B.
- Tribunal upheld CIT(A) as no evidence gifts were not for business purpose.

3. Employers P.F. Contribution and Employees P.F. Contribution:
- Tribunal referred to previous decisions against revenue.
- Held in line with previous rulings, contributions paid before due date not to be disallowed.

Assessment Year 2004-05:

1. Disallowance of Guest House Expenses:
- Tribunal upheld deletion of disallowance based on previous year's decision.

2. Disallowance of Gifts and Presents:
- Tribunal upheld deletion of disallowance based on previous year's decision.

3. Employers P.F. Contribution and Employees P.F. Contribution:
- Tribunal upheld deletion of both disallowances based on previous year's decision.

Cross Objections (C.O.) for Assessment Year 2003-04:

1. Expenses for Issue of Bonds:
- AO treated as capital expenditure, disallowed.
- CIT(A) confirmed AO's decision.
- Tribunal allowed deduction u/s 37 based on High Court ruling.

2. Provision for Contractual Obligation:
- Disallowance confirmed by CIT(A) based on pending High Court appeal.
- Tribunal held in favor of assessee based on earlier Tribunal decision.

Cross Objections (C.O.) for Assessment Year 2004-05:

1. Expenses for Issue of Bonds:
- Tribunal allowed as revenue expenditure based on previous year's decision.

2. Provision for Contractual Obligation:
- Tribunal held AO not justified in disallowing based on previous year's decision.

In conclusion, the appeals of the revenue were dismissed, and the cross objections of the assessee were allowed.

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