1979 (8) TMI 61

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.... of the revenue, the following question of law has been referred to this court: " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the word ' expenditure ' used in section 40A(3) of the Income-tax Act does not cover expenditure on purchase of raw material ? " The assessee known as M/s. New Light Tin Manufacturing Company, Sonepat, is a....

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....d bank draft. The assessee's plea that he had to purchase a quantity of tin plates for his manufacturing business, in addition to the quota allotted to him by the Government, from other quota-holders at a premium and that those quota-holders would not agree to accept payment by cheque or bank drafts as they were violating the law in not utilising their quota of tin plates for their own manufacturi....

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.... 40A(3) of the Act. According to the Tribunal, the terms " expenditure " as used in the said s. 40A related only to those expenses, regarding which a question as to their deduction out of the gross profits arises. Taking this view of the matter, the Tribunal allowed the appeal and held the expenditure in question as allowable. The question of law referred to this court has already been dealt wi....