Tax deduction and revenue adjustments: unbilled revenue addition upheld, section 10A allowed, and bonus disallowance rejected.

The note discusses three income-tax issues: unbilled revenue, deduction eligibility, and bonus disallowance. It states that an addition for unbilled revenue was upheld because the record did not show that the amount had already been offered to tax or supported by bills, vouchers, or receivable particulars. It also explains that a claim under section 10B was rejected for non-compliance with the prescribed approval requirement, while an alternative claim under section 10A was allowed because the assessee filed a revised return and Form 56F, and the eligibility conditions were otherwise met. The bonus disallowance under section 43B was rejected because the appellate record disclosed no infirmity in the allowance granted.

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Issues: (i) Whether the addition made on account of unbilled revenue was sustainable; (ii) whether the assessee was entitled to deduction under section 10B or, alternatively, section 10A; (iii) whether disallowance of bonus payment under section 43B was justified.

Issue (i): Whether the addition made on account of unbilled revenue was sustainable.

Analysis: The assessee claimed that the difference between opening and closing unbilled revenue had already formed part of the year's taxable revenue and that taxing it again would amount to double taxation. The record, however, did not contain evidence to show that the unbilled revenue had been included in the revenue offered to tax for the year. There was also no supporting material such as bills, vouchers, or receivable particulars to explain the source and treatment of the amount.

Conclusion: The addition on account of unbilled revenue was upheld and the assessee's objection was rejected.

Issue (ii): Whether the assessee was entitled to deduction under section 10B or, alternatively, section 10A.

Analysis: The claim under section 10B was disallowed on the basis that approval from the authority contemplated for that provision had not been obtained in the prescribed manner, and the issue was treated as covered against the assessee by binding precedent. The alternative claim under section 10A was examined in the revenue's appeal. The assessee had filed a revised return along with Form 56F before the appellate authority, and the objection based on the absence of such claim in the original return was treated as only technical. Since the eligibility conditions for section 10A were otherwise shown to be satisfied, the alternative deduction was held allowable.

Conclusion: The denial of deduction under section 10B was sustained, while the allowance of deduction under section 10A was also sustained.

Issue (iii): Whether disallowance of bonus payment under section 43B was justified.

Analysis: The bonus provision had already been debited in the profit and loss account and adjusted in the computation, and the appellate record did not disclose any infirmity in the allowance granted by the first appellate authority. The revenue's challenge was therefore not accepted.

Conclusion: The disallowance of the bonus claim was rejected and the assessee was held entitled to the allowance.

Final Conclusion: Both the assessee's appeal and the revenue's appeal failed, and the cross-objection also did not survive.

Ratio Decidendi: A deduction claim may be examined on its substantive eligibility even when raised as an alternative appellate claim, while additions and disallowances must rest on supporting evidence and cannot be sustained on mere technical or unsubstantiated objections.

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