Revisional interference for lack of verification was upheld, while interest restriction and truck-account addition were deleted on merits.

Revisional interference under section 263 was justified because the assessment record showed that the Assessing Officer had not verified a material expense claim, so the revisional order was sustained. The restriction of interest at 15% was deleted because the assessee had consistently paid and received interest at 24% per annum, and that rate had already been accepted in an earlier year. The addition of truck-account income was also deleted because it was not part of the basis for the section 263 revision and similar additions had been deleted on merits. The disallowance of the expense claim of Rs. 2,500 was sustained because the claim had not been properly verified.

---

---

Issues: (i) Whether the revisional order under section 263 of the Income-tax Act, 1961 was valid; (ii) whether interest paid at 24% per annum was allowable instead of being restricted to 15%; (iii) whether the addition of Rs. 47,913 from truck account could be sustained; and (iv) whether the disallowance of Rs. 2,500 was justified.

Issue (i): Whether the revisional order under section 263 of the Income-tax Act, 1961 was valid.

Analysis: The assessment had already been made afresh pursuant to the revisional order, so the challenge to the exercise of revisional power had become academic. On merits, the assessment record showed that the Assessing Officer had not verified the claim of expenses of Rs. 2,500, which justified the revisional interference.

Conclusion: The revisional order under section 263 was upheld.

Issue (ii): Whether interest paid at 24% per annum was allowable instead of being restricted to 15%.

Analysis: The assessee's own case for an earlier assessment year had already accepted interest at 24% per annum, and the record showed that this rate had been consistently paid and received. The restriction to 15% was therefore unwarranted.

Conclusion: The addition restricting interest to 15% was deleted and interest at 24% per annum was allowed.

Issue (iii): Whether the addition of Rs. 47,913 from truck account could be sustained.

Analysis: The addition was not one of the grounds on which the original assessment had been set aside under section 263. In the assessee's own case for an earlier year, similar additions in the truck account had already been deleted on merits.

Conclusion: The addition of Rs. 47,913 was deleted.

Issue (iv): Whether the disallowance of Rs. 2,500 was justified.

Analysis: The claim of expenditure had not been properly verified, and on the facts the disallowance was found to be reasonable.

Conclusion: The disallowance of Rs. 2,500 was sustained.

Final Conclusion: The revisional order was sustained, but the additions relating to interest and truck account were deleted, leaving only the disallowance of Rs. 2,500 in force.

Ratio Decidendi: Revisional interference is justified where the assessment record shows lack of verification of a material claim, while additions made without adequate basis cannot be sustained.

---