Tribunal upholds disallowance of deductions for milk processing and various expenses.

The Tribunal dismissed both appeals filed by the assessee, upholding the disallowances of deduction u/s.80IB for standardization and pasteurization of milk, as well as the disallowance of expenses for travelling, conveyance, repairs, and maintenance of vehicles, postage, and telephone.

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Issues:
1. Disallowance of deduction u/s.80IB for standardization and pasteurization of milk.
2. Disallowance of expenses for travelling, conveyance, repairs, and maintenance of vehicles, postage, and telephone.

Issue 1: Disallowance of deduction u/s.80IB for standardization and pasteurization of milk:
In the case for Assessment Year (A.Y.) 2004-05, the assessee appealed against the disallowance of deduction u/s.80IB by the CIT(A) claiming that standardization and pasteurization of milk constitute manufacturing. The Assessing Officer disallowed the deduction based on previous decisions. The assessee referred to a High Court order admitting an appeal on whether pasteurization of raw milk amounts to manufacture. The Departmental Representative agreed to pass an appropriate order due to the pending High Court decision. The Tribunal noted that the issue had been decided against the assessee by a Special Bench of the Tribunal. However, considering the pending High Court decision for previous years, the Tribunal directed the Assessing Officer to amend the order if the issue is decided in favor of the assessee later. The first ground raised by the assessee was decided in terms of the above directions.

Issue 2: Disallowance of expenses for travelling, conveyance, repairs, and maintenance of vehicles, postage, and telephone:
Regarding the disallowance of Rs.75,000 from claimed expenses for the A.Y. 2004-05, the Assessing Officer disallowed the amount on an estimate basis due to lack of proper records. The CIT(A) upheld the disallowance, which the Tribunal also affirmed. The assessee's argument that the expenses belonged to the company and should not be disallowed was rejected as there was no evidence that these expenses were part of employee perquisites. The Tribunal dismissed the second ground raised by the assessee.

Conclusion:
Both appeals filed by the assessee were dismissed by the Tribunal, upholding the disallowances of deduction u/s.80IB for standardization and pasteurization of milk, as well as the disallowance of expenses for travelling, conveyance, repairs, and maintenance of vehicles, postage, and telephone.

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