Appeal dismissed on supply contract deduction, interest remanded, additional relief granted on expense disallowance

For the assessment year 1980-81, the Revenue's appeal challenging a deduction related to a supply contract for telephone poles was dismissed by the Tribunal. The CIT(A)'s decision allowing the deduction was upheld as the assessee unilaterally estimated an amount without creating a liability, later adjusting it based on the actual due amount. The assessee's cross objection supporting the CIT(A)'s decision was deemed infructuous. In the appeal for the same year, the Tribunal remanded the matter to the CIT(A) regarding the charging of interest under the IT Act. For the assessment year 1981-82, the Tribunal granted additional relief to the assessee for the disallowance of expenses, resulting in a successful appeal.

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Issues:
- Cross appeals for asst. yr. 1980-81 and a cross objection of the assessee for the same assessment year
- Another appeal of the assessee for the asst. yr. 1981-82

Analysis:
1. For the asst. yr. 1980-81, the main issue revolved around the deduction claimed by the assessee related to a supply contract for telephone poles. The Revenue contested the deduction of Rs. 29,191 allowed by the CIT, arguing that the claim did not pertain to the assessment year. The CIT(A) accepted the deduction, noting that no bills were sent to the P&T Department for the estimated amount of Rs. 4,01,141. The Tribunal upheld the CIT(A)'s decision, emphasizing that the assessee unilaterally estimated an amount without creating any liability, and later corrected the estimate based on the actual amount due. The Revenue's appeal was dismissed.

2. The cross objection of the assessee for the same year was in support of the CIT(A)'s decision, which was already upheld by the Tribunal. As the grounds of the cross objection were deemed infructuous, they were dismissed.

3. In the assessee's appeal for the same year, the issue raised concerned the charging of interest under s. 139(8) of the IT Act. The CIT(A) rejected the ground, stating that the charging of interest was not appealable and the relevant amendment was not retrospective for that assessment year. The Tribunal disagreed with the CIT(A)'s decision, citing a Supreme Court case and held that the levy of interest under s. 139(8) was appealable. The matter was remanded to the CIT(A) for fresh disposal.

4. Moving to the appeal for the asst. yr. 1981-82, the only issue raised by the assessee was regarding the relief admissible for the disallowance of expenses. The CIT(A) incorrectly calculated the relief, leading to the assessee being entitled to additional relief. The Tribunal granted further relief to the assessee, and the appeal for the year 1981-82 succeeded.

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