2002 (11) TMI 788

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....ar Pneumatic Co. Ltd. 2. In the profit & loss account for the year ended 31-3-1993, the assessee claimed deduction in respect of salaries allowance and bonus of Rs. 1,59,938.60 and travelling expenses of Rs. 63,888.42. Included in those were the salaries paid to one J.A. Ghatte between March, 1992 to February, 1993 in the sum of Rs. 9,393 and Mr. Parag Joshi, for the period July, 1992 to February, 1993 in the sum of Rs. 7,770. Both of them were claimed to be sales representatives. Those persons had also been paid travelling expenses of Rs. 25,437.69 and Rs. 19,663 respectively. In the assessment proceedings, the Assessing Officer did not see any justification for allowing those amounts as deduction. The matter was carried by the assessee....

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....ed that the payments were made to these persons after deducting the professional tax and that they had also confirmed the receipt. In these circumstances, it was submitted that merely because the amounts are not found available in the assessment for lack of evidence, it cannot be stated that the assessee had concealed its income. 4. The Assessing Officer did not accept the assessee's explanation. He held that it has not been proved that the expenditure claimed by way of salary and allowances to Ghatte and Joshi were incurred wholly and exclusively for the purposes of the assessee's business under section 37(1) and that the assessee was not in a position to substantiate their services with documentary evidence in all the three stages up t....

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....ther expense, etc. The expense sheet which are at pages 7 & 9 of the paper book also show the details of journeys undertaken, the mode of transport, the fare, postage or telephone expenses, hotel expenses etc. incurred by the employees in columnar form. The fact that these details have been furnished even at the assessment stage is not disputed before us. It is not also disputed that the amounts were paid to Ghatte and Joshi by account payee demand draft and after deducting the professional tax from the amount of salary paid. It may be that the assessee was not able to prove the claim for deduction of the expenses in the manner required by the departmental authorities. A perusal of the Tribunal's order, the relevant portion from which has b....