Expense disallowance confined to identifiable inadmissible items; unsupported travelling and miscellaneous expense additions were deleted.

Disallowances of business expenses were partly unsustainable where the record showed only a single inadmissible donation item in the M.S. Bansal & Co. set, so the general-expense disallowance was confined to that amount. Travelling-expense disallowances in the Ruby Theatres set were deleted because the expenses were supported and no inadmissible item justified retention. Travelling and miscellaneous expense disallowances in the Novelty Talkies set were also deleted because neither authority identified any inadmissible item. The assessee succeeded except for the limited disallowance sustained for the donation item.

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Issues: (i) whether the disallowance out of general expenses in the M.S. Bansal & Co. set should be sustained in full or reduced; (ii) whether any part of the disallowance out of travelling expenses in the Ruby Theatres set should be retained; and (iii) whether the disallowances out of travelling expenses and miscellaneous expenses in the Novelty Talkies set were justified.

Issue (i): whether the disallowance out of general expenses in the M.S. Bansal & Co. set should be sustained in full or reduced

Analysis: The only inadmissible item pointed out in the relevant expenditure was a donation of Rs. 150. No basis was shown for sustaining a larger disallowance.

Conclusion: The disallowance was reduced to Rs. 150, in favour of the assessee.

Issue (ii): whether any part of the disallowance out of travelling expenses in the Ruby Theatres set should be retained

Analysis: The expenses were supported and no inadmissible item was identified to justify retention of any part of the disallowance.

Conclusion: The disallowance of Rs. 300 was deleted, in favour of the assessee.

Issue (iii): whether the disallowances out of travelling expenses and miscellaneous expenses in the Novelty Talkies set were justified

Analysis: The expenses were supported and neither the assessing authority nor the appellate authority pointed out any inadmissible item.

Conclusion: The disallowances were deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded only to the extent of reducing and deleting the disallowances except for Rs. 150 sustained in respect of the M.S. Bansal & Co. set.

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