1978 (11) TMI 100

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....Rs. 22,636 as under. Draw backs Rs. 1,26,127 Cash incentives Rs. 39,671 Total Rs.1,65,798 Amount admitted in the profit and loss account Rs.1,43,162 . Rs.22,636 The assessment order states that according to the assessee only the net receipts had bee admitted and the difference of Rs.22,636 represented expenditure in connection with trade. According to the ITO the assessee was not able to state the nature of the expenditure though opportunities were allowed and he brought to tax the amount of Rs. 22,636. 2. The assessee appealed to the AAC and it was submitted before him that out of Rs. 24,636, Rs. 7,636 represented freight charges incurred and the balance of Rs.15,000 was paid to one Shri Jasraj who had i....

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....ted to the account of M/s Neela Industries on 5th Nov, 1972 along with commission of Rs. 3,950 and the total amount of Rs. 18,950 was due to him from the assessee. Shri Jasraj also gave the particulars of ITO by whom he was assessed and his permanent account and G.I. No. (47-027-Pt-2807 (10785-J) assessed by the 10th ITO City Circles IV, (Madras). According to the ld. counsel, inasmuch as Shri Jasraj had rendered services for obtaining the draw back amounts and had admitted to receiving the amounts in question from the assessee for services rendered, there could be no question of making any disallowance in the hands of the assessee. A reference was also made to the ratio of the judgment of the Madras High Court in CIT vs. Vijayalakshmi Mill....

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....th Feb, 1977. There was the written statement of Shri Jasraj before the AAC Shri Jasraj had not been examined further on the averments in the written statement regarding the expenditure stated to have been incurred by him under various heads of which details have been given earlier. We find from the records of assessee that the draw back amounts related to several exports. The fact that services were rendered by Shri Jasraj for getting the draw back amounts cannot be disputed. Shri Jasraj has shown amounts towards salary payments by him. Inasmuch as, he has not been examined, it cannot be held that in the assessee's case any disallowance could be made for this item. The records of Shri Jasraj shows that he had borrowed funds from third part....