TaxTMI 
TaxTMI 
2013 (4) TMI 788
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....essee has raised as many as 5 grounds of appeal but the effective ground is in respect of disallowance of Rs. 50,000/- out of freight and transportation expense and Rs. 50,000/- out of building repair and maintenance. 4. Brief facts of the case are that the assessee derives income from manufacture and trading of jute goods and synthetic yarn. The assessee filed return of income declaring total income of Rs. 2,43,64,263/-. The assessee appeared before the Assessing Officer and produced books of account. The books of account produced were test-checked by the Assessing Officer. The Assessing Officer noticed that in Jute Division the assessee has debited Rs. 32,55,894/- and in Synthetic Division Rs. 10,49,031/-, totalling to Rs. 43,04,925/- on account of freight and transportation. The Assessing Officer noticed that the assessee claimed the above expenditure in many cases on the basis of self-made vouchers. The expenses are not fully vouched, therefore, the Assessing Officer disallowed Rs. 50,000/- and made addition of that amount . Similarly the Assessing Officer noticed that the assessee has debited Rs. 18,83,703/- in Jute Unit and Rs. 3,59,592/- in Mahabir Syntax Unit on account of....
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....t in the manner provided in section 144. Section 145 is mandatory and the Revenue is bound by the assessee's choice of a method regularly employed unless by that method the true income, profits and gains cannot be arrived at. In other words, section 145 enacts that for the purpose of section 28 (profits and gains of business, profession or vocation) and section 56 (income from other sources), income, profit and gains must be computed in accordance with the method of accounting regularly employed by the assessee. Therefore, if the assessee regularly employs a particular method of accounting and if no defects are found in the method or maintenance of accounts, the taxing authority is bound to compute the profits and gains of business or profession or vocation in accordance with the method employed by the assessee. Therefore, in case where the Income-tax Officer or the taxing authority finds that in maintaining accounts, the assessee has regularly employed a particular method and does not make any investigation to find or does not find any defect in the accounts and accept the accounts as they are, he is bound to compute the income in accordance with the accounts maintained by the....
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....The value at the rate of 20% came to Rs. 95,257/-. The A.O., after considering the assessee's submission, made addition of Rs. 95,257/- on the ground that the assessee has debited the same said sums to boost the sales, therefore, value of Rs. 95,257/- added back to the total value of FBT shown. Similarly, the Assessing Officer noted value of fringe benefit @ 20% on account of employee welfare, repair, running, maintenance of motor cars, use of telephone, tour and travel, excess value out of repair and running of motor cars. The A.O. has determined total value of fringe benefit of Rs. 6,45,177/- as under :- SN Head of expenses Total expenses Rate Value of fringe benefit 1. Sales Incentives 4,76,285/- 20% 95,257/- 2. Employee Welfare 2,68,773/- 20% 53,755/- 3. Repair, running (including fuel), Maintenance of motor cars and the amount of depreciation thereon 12,23,810/- 20% 2,44,762/- 4. Use of telephone 9,26,726/- 20% 1,85,345/- 5. Tour and travel 12,44,804/- 5% 62,240/- 6. Excess value of fringe benefit as worked out above on Repair, running (including fuel), maintenance of motor cars and the amount of depreciation thereon, 19,100/- 20% 3,....
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.... trade but does not include- (i) any expenditure on, or payment for, food or beverages provided by the employer to his employees in office or factory; (ii) any expenditure on or payment through paid vouchers which are not transferable and usable only at eating joints or outlets; (iii) any expenditure on or payment through non-transferable pre-paid electronic meal card usable only at eating joints or outlets and which fulfils such other conditions as may be prescribed; (C) conference (other than fee for participation by the employees in any conference). Explanation : For the purposes of this clause, any expenditure on conveyance, tour and travel (including foreign travel), on hotel, or boarding and lodging in connection with any conference shall be deemed to be expenditure incurred for the purposes of conference; (D) sales promotion including publicity : Provided that any expenditure on advertisement,- (i) being the expenditure (including rental) on advertisement of any form in any print (including journals, catalogues or price lists) or electronic media or transport system; (ii) being the expenditure on the holding of, or the participation in, any press conference....