TaxTMI 
TaxTMI 
2012 (4) TMI 846
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....ITA No. 3541/Mum/2005 filed by the assessee and ITA No. 4773/Mum/2005 filed by the Revenue, which are directed against the order of learned CIT(Appeals)-XIX, Mumbai dated 31-03-2005. 3. The common issue involved in ground No. 1 of the assessee's appeal as well as ground No. 1 of the Revenue's appeal relates to the disallowance of Rs. 63,95,767/- made by the AO out of travelling expenses which has been sustained by the learned CIT(Appeals) to the extent of Rs. 15,16,299/-. 4. The assessee in the present case is a Company which is engaged in the business of manufacturing of yarn and trading in cloth. It also receives income from rental activities and warehousing. The return of income for the year under consideration i.e. assessment year 2001-02 was filed by the assessee on 29-102001 declaring a loss of Rs. 20,11,507/-. In the profit & loss account filed along with the said return, a sum of Rs. 63,95,767/- was claimed by the assessee on account of foreign travel expenses. The said expenses claimed by the assessee on account of foreign travel were disallowed by the A.O. on the ground that there was failure of the assessee to explain the pur....
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....three years of service." Similar terms of the employment are with Sri Atul R. Ruia, who is husband of Mrs. Gayatri Ruia. As the medical expenses incurred were not fully covered by the terms of the employment of the directors and their family members, a special resolution was passed at the meeting of the Board of Directors of the company, held on 29/04/2001 at 3.30 p.m. at the registered office of the company. The resolution reads as under:- "RESOLVED that the medical and travelling related to medical treatment of 1. Mrs. Gayatri Atul Ruia Rs. 10,36,017/- 2. Mr. Ashok Ruia Rs. 27,34,883/- Total Rs. 37,70,900/- be and is hereby approved by the board of directors as a special case - It is further RESOLVED that the travelling expenditure of the family accompanying the above are also approved" 5.2.2 In my considered opinion, the aforesaid expenses incurred by the appellant company are in the nature of perquisites/remuneration in the hands of the concerned Managing Director/director. The sums paid by the company in connection with the medical treatment are in respect of an obligation which, but for such payment by the company, would h....
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....lay or an expenditure incurred connected with new business before commencement of the business would be of capital nature. (EID Parry (India) Ltd. Vs. CIT (2002) 227 ITR 253 and decision of Supreme Court in the case of Swadeshi Cotton Mills Co. Ltd. Vs. CIT (1967) 63 ITR 65) Undisputedly the appellant company never was in the business of education. The appellant company since its inception is in the business of textile manufacturing. Of late, it has diversified its revenue realizing activities by utilizing the assets of the company for the purpose of developing a shopping mall and to earn income interalia by way of rentals. Education was never an area of operation. If the company proposes to start such business it would be new business and any expenditure incurred to start a new business cannot be allowed as a revenue expenditure. The disallowance of Rs. 15,16,299/- is, therefore, confirmed. 5.4 The expense of Rs. 4,51,521/- is explained to be for the purpose of expanding the business of retail garments. This trip was taken by Mrs. Gayatri Ruia, who is wife of Sri Atul Ruia. As discussed above, major expense of Rs. 4,51,521/- is allowed. However, I am not co....
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....etails furnished by the assessee in respect of each foreign trip were examined by the learned CIT(Appeals) and on such examination, the said expenses to the extent of Rs. 48,79,468/- were found to be incurred by the assessee for the purpose of its business. He submitted that the foreign travel expenses to the extent of Rs. 15,16,299/- have been held to be not for the purpose of business of the assessee by the learned CIT(Appeals) on the ground that the purpose of the said visits was to start the school business whereas the assessee company was never in the business of education. He contended that although education was the new line of business, the said activity was controlled by the same management and there being unity and control of management, the foreign travel expenses incurred in connection with the education activity was liable to be allowed as business expenses. In support of this contention, he relied on the decision of Hon'ble Bombay High Court in the case of Antifriction Bearings Corporation Ltd. v. CIT 114 ITR 335. 6. The learned DR, on the other hand, submitted that the relevant details and documents in support of its claim for foreign travel expenses wer....
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....,299/-, it is observed that various reasons were given by the learned CIT(Appeals) to confirm the disallowance made by the AO on this issue to that extent. As noted by him in this regard, the said expenses were incurred on the foreign trips undertaken by Ms. Rakhi Ruia also who was neither an employee nor the Director of the assessee company. She was a daughter of a Director of the assessee company. Moreover, the said expenses were claimed to be incurred in connection with starting of the school business which was not the existing line of business of the assessee company. Furthermore, the said new line of business had not even commenced by the assessee and the expenses incurred on travelling thus was before the commencement of the said business which, as rightly held by the learned CIT(Appeals), could not be allowed as revenue expenditure. The decision of Hon'ble Bombay High Court in the case of Antifriction Bearings Corporation Ltd. v. CIT 114 ITR 335 cited by the learned counsel for the assessee is also not applicable in the case of the assessee being distinguishable on facts. We, therefore, find no justifiable reason to interfere with the impugned order of the learned CIT(Appeal....
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.... limited purpose of considering the alternative claim of the assessee for deduction of bad debts written off being business loss on merits. Ground No. 2 of the assessee's appeal is accordingly dismissed whereas ground No. 3 is treated as allowed for statistical purposes. 11. As regards ground No. 4, it is observed that the issue raised therein relating to disallowance of assessee's claim for deduction of Rs. 72,600/- u/s 35D on account of expenses incurred to increase the share capital in the form of stamp duty and ROC filing fees is squarely covered against the assessee and in favour of the revenue by the decision of Hon'ble Supreme Court in the case of Brook Bond India Ltd. 225 ITR 798. Respectfully following the said decision of Hon'ble Apex Court, we uphold the impugned order of the learned CIT(Appeals) confirming the disallowance made by the AO on this issue and dismiss ground No. 4 of the assessee's appeal. 12. As regards the next issue raised in ground No. 5 of the assessee's appeal relating to addition of Rs. 2,31,420/- made by the AO and confirmed by the learned CIT(Appeals) on account of Modvat credit included in the closing stock ....
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....erest expenses to the extent attributable to the said borrowed funds could not be allowed as deduction. He, however, found that the remaining borrowed funds were either used by the assessee for the purpose of its business or for the purpose of carrying out repairs and renovations to the let out properties. He, therefore, held that out of the interest expenses of Rs. 1,99,25,052/- disallowed by the AO, a sum of Rs. 1,48,74,607/- was liable to be allowed as deduction under the head "Profits & gains of business or profession" Accordingly, disallowance of Rs. 1,99,25,052/- made by the AO out of interest expenses was restricted by the learned CIT(Appeals) to Rs. 50,50,445/-. 15. We have heard the arguments of both the sides and also perused the relevant material on record. It is observed that the details of utilization of borrowed funds furnished by the assessee were verified by the learned CIT(Appeals) and on such verification, he found that the borrowed funds to the extent of Rs. 2,05,01,217/- were used by the assessee for work in progress in respect of the properties which had not been let out whereas the remaining borrowed funds were used either for the p....
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....nbsp;15,46,687/-. On perusal of the details of the said expenses furnished by the assessee, the AO found that the same to the extent of Rs. 9,21,920/- were incurred by the assessee in respect of either the property under development which was to be given on rent or in respect of property which was already given on rent. He held that the said expenses to that extent thus were not incurred by the assessee for the purpose of business but were incurred in relation to rental income which was chargeable to tax under the head "Income from house property". Since deduction for the said expenses under the head "Income from house property" was not allowable as per the provisions of section 24, the AO disallowed the claim of the assessee on account of legal and professional charges to the extent of Rs. 91,21.120/-. On appeal, the learned CIT(Appeals) confirmed the disallowance made by the AO on this issue observing that the legal and professional charges to the extent of Rs. 9,21,120/- paid by the assessee were mainly incurred for protection of the property owned by it. He held that the said expenditure was incurred in relation to disputes pending in the court of touching upon t....
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....sue. The same is, therefore, upheld dismissing ground No. 9 of the assessee's appeal. 20. The common issue raised in ground No. 10 of the assessee's appeal and ground No. 4 of the Revenue's appeal relates to the disallowance of Rs. 24,21,789/- made by the AO out of brokerage and commission expenses which has been sustained by the learned CIT(Appeals) to the extent of Rs. 4,52,000/-. 21. In its profit & loss account filed along with the return of income, the assessee company had debited brokerage and commission expenses of Rs. 24,41,789/-. As required by the AO, the details of the said expenses were furnished by the assessee and the same were also extracted by the AO on page No. 11 of the assessment order. According to the AO, the details so furnished by the assessee revealed that the relevant expenses were incurred by the assessee in relation to letting out of its property and the same were not allowable either as business expenditure or under the head "Income from house property". He also held that the said expenses were inclusive of a sum of Rs. 10 lakhs paid by the assessee to M/s Siddhi Realtors for carrying out feasibility study fo....
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.... for comprehensive restructuring of business cannot be treated as capital expenditure. In the case of appellant, the report was not for the purpose of any new business but for the purpose of expanding the existing business related to the textile and garment manufacturing and to carry out the same in a more efficient way. CIT Vs. Crompton Engineering Co. Ltd. (2000) 242 ITR 317 (Mad.). It has also been held that Techno Economic Feasibility study to identify projects that may be taken up by the assessee would be allowable as revenue expenditure, since expenses could be treated as facilitating trading operation for carrying on the business more efficiently giving advantage in revenue field. (CIT Vs. Coromandal Fertilizers (2001) 247 ITR 417 (AP). It is held by Calcutta High Court in the case of Keshoram Industries & Cotton Mills Ltd. vs. CIT (1992) 196 ITR 845 that extension of assessee's business could not be treated as an activity, which will dis-entitle the expenditure for the business purposes. In such circumstances, the expenditure of Rs. 10,00,000/- incurred to carry out feasibility study should be treated as revenue expenditure and allowable under the head business expense....
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....g all the facts of the case, we are of the view that the learned CIT(Appeals) has passed a well-reasoned and well discussed order on this issue while sustaining the disallowance of Rs. 24,21,789/- made by the AO out of brokerage and commission expenses to the extent of Rs. 4,52,000/- and we find no justifiable reason to interfere with the same. His impugned order on this issue is, therefore, upheld dismissing ground No. 10 of the assessee's appeal and ground No. 4 of the Revenue's appeal. 25. The next common issue involved in ground No. 11 of the assessee's appeal and ground No. 5 of the Revenue's appeal relates to the disallowance of Rs. 1,17,48,141/- made by the AO out of indirect expenses which has been sustained by the learned CIT(Appeals) to the extent of Rs. 34,07,853/-. 26. In its profit & loss account filed along with the return of income, indirect expenses were debited by the assessee under the various heads aggregating to Rs. 2,44,75,294/-. According to the AO, the said expenses were also attributable to the rental activity carried on by the assessee. He noted in this regard that despite the falling sales revenues, the ex....
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....ed, there is no justification to make any proportionate allocation as the expenses were incurred for the purpose of business exclusively. Remaining expenses of Rs. 27,92,888/- can be allocated partly to the head "Income from House Property". 13.5.3 So far as the Auditor's remuneration is concerned, it is in the nature of a statutory requirement for the very existence of the company and, therefore, same should be allowed under the head "Business Income" and there is no justification to allocate such expenses under the head "Income from House Property". 13.5.4 So far as the Director's remuneration Rs. 29,50,569/- is concerned, it is submitted that the payment is approved by the share holders. In this regard, in my opinion, the AO is justified to allocate certain expenses to the income under the head "House Property" for the reason that major energy of the Directors is being utilized for restructuring the revenue earning potential of the company's assets by converting them into commercial properties for the purpose of earning rental income. 13.5.5 Director's fees of Rs. 1200/- is allowable entirely under the head "Business Expenses". ....
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....lize the various expenses to be allowed on fixed percentage basis. He contended that there is, however, no provision contained in the Income-tax Act, 1961 allowing allocation of expenses among different heads of income. He contended that the allocation of expenses sought to be made among exempt income and taxable income was also not accepted by the Hon'ble Supreme Court in the cases of CIT vs. Indian Bank Ltd. 56 ITR 77, CIT vs. Maharashtra Sugar Mills Ltd. 82 ITR 452 and Rajasthan State Warehousing Corporation vs. CIT 242 ITR 450. He submitted that the assessee in the present case is carrying on one individual business of leasing and textile and merely because income of the said business was chargeable to tax under two different heads of income, the relevant activity of leasing does not cease to be a business activity merely because rental income of the said activity is chargeable to tax under the head "Income from house property". In support of this contention, he relied on the decision of Hon'ble Supreme Court in the case of United Commercial Bank Ltd. vs. CIT 32 ITR 688. 29. The learned DR, on the other hand, submitted that if the profit derived by the assessee from its busi....
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.... computation of income of the assessee head wise cannot be made without apportionment of common expenses and such apportionment thus is embedded in the computation provisions itself without there being any specific requirement of having separate provisions permitting such apportionment. 31. At the time of hearing before us, the learned counsel for the assessee has relied on the decision of Hon'ble Supreme Court in the case of CIT vs. Indian Bank Ltd. (supra), CIT vs. Maharashtra Sugar Mills Ltd. (supra) and United Commercial Bank Ltd. vs. CIT (supra) to contend that the apportionment of expenses incurred by the assessee for composite business activity is not permissible. A careful perusal of the judgments of the Hon'ble Supreme Court delivered in the said cases, however, shows that the decision therein was rendered by the Hon'ble Apex Court in a different context. In the said cases, apportionment of expenses was sought to be made between two items of income, one of which was taxable whereas other was exempt under the Act and it was held by the Hon'ble Supreme Court in this context that the entire permissible expenditure in earning income from the head chargeable to tax was deduc....
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....ut by the AO after analyzing the nature and character of each item of expenses involved in such expenses. Paragraph No. 13.5 giving such analysis in detail has already been reproduced by us in the foregoing portion of this order which clearly shows that the major item of expense amounting to Rs. 1,08,00,000/- was incurred by the assessee on account of packing charges of yarn and as rightly held by the learned CIT(Appeals), there was no justification to make any apportionment of the said expense head-wise since the same was clearly incurred by the assessee exclusively for the purpose of its textile business having no relation whatsoever with the leasing activity resulting in earning of rental income chargeable to tax under the head "Income from house property". Similarly, the learned CIT(Appeals) in our opinion, was fully justified in including receipt from service charges in the total turnover to work out the percentage of rental income in total turnover of the assessee at 34% for the purpose of apportionment of common expenses. As rightly held by the learned CIT(Appeals), the AO was not correct in excluding the service charges for this purpose especially when some of the....
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.... rent received for determining the annual letting value of the properties, thereby allowing the deduction on account of repairs and maintenance as claimed by the assessee. 35. We have heard the arguments of both the sides on this issue and also perused the relevant material on record. As found by the learned CIT(Appeals) on perusal of relevant lease agreement, the burden of municipal taxes in respect of properties let out by the assessee was borne by the tenants and there is nothing brought on record before us to controvert or rebut this finding of fact recorded by the learned CIT(Appeals). Proviso to section 23 lays down in very clear terms that if the property is in occupation of the tenants, then the tax levied by local authority in respect of that property shall be deducted in determining the annual value of the property only to the extent such taxes are borne by the owner. In the present case, all the municipal taxes having been borne by the tenants and not by the assessee as an owner, we are of the view that the learned CIT(Appeals) was fully justified in directing the AO not to reduce the amount of municipal taxes from annual letting value for the purpose of computing inc....
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....CIT(Appeals) confirming the disallowance made by the AO on this issue and dismiss ground No. 3 of the assessee's appeal. 40. Ground No. 4 of the assessee's appeal and ground No. 3 of the Revenue's appeal involve common issue relating to disallowance made by the AO out of commission and brokerage which has been sustained by the learned CIT(Appeals) partly. As agreed by the learned representatives of both the sides, this issue is similar to the one involved in ground No. 10 of the assessee's appeal and ground No. 4 of the Revenue's appeal for assessment year 2001-02 which has been decided by us in paragraph No. 24 of this order. Since all the material facts relating to this issue as involved in assessment year 2003-04 are similar to assessment year 2001-02, we follow our conclusion drawn in assessment year 2001-02 and uphold the impugned order of the learned CIT(Appeals) sustaining the disallowance made by the AO out of commission and brokerage expenses. Ground No. 4 of the assessee's appeal and ground No. 3 of the Revenue's appeal are accordingly dismissed. 41. Ground No. 5 of the assessee's appeal and ground No. 2 of the Reven....
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....capitalized the balance amount of Rs. 1,36,18,894/- on the ground that the same was attributable to the borrowed funds utilized for buildings under construction. The AO allowed 50% of the total interest expenses claimed by the assessee as deduction while computing income of the assessee under the head "Income from house property". He held that the balance 50% interest amounting to Rs. 1,90,37,137/- was attributable to the borrowings utilized by the assessee for building under construction and the same, therefore, was capital in nature. Since the assessee company had capitalized interest only to the extent of Rs. 1,36,18,894/- and had claimed the balance amount as deduction, the AO disallowed the claim of the assessee for deduction on account of interest to the extent of Rs. 54,18,244/- i.e. Rs. 1,90,37,137 - Rs. 1,36,18,894. On appeal, the learned CIT(Appeals) found on verification of the relevant details furnished by the assessee relating to utilization of borrowed funds that the interest of Rs. 1,36,18,894/- was rightly capitalized by the assessee as the same was attributable to the borrowed funds actually utilized by the assessee for buildings ....
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....been decided by us in paragraph No. 11 of this order. Following the conclusion drawn in assessment year 2001-02, we uphold the impugned order of the learned CIT(Appeals) confirming the disallowance made by the AO on this issue and dismiss ground No. 1 of the assessee's appeal. 49. As regards ground No. 2 of the assessee's appeal, it is observed that the issue raised therein relating to addition made on account of Modvat credit pertaining to closing stock is similar to ground No. 5 of the assessee's appeal for assessment year 2001-02 which has already been decided by us in paragraph No. 12 of this order. Following our conclusion drawn in assessment year 2001-02, we set aside the impugned order of the learned CIT(Appeals) on this issue and restore the matter to the file of the AO with a direction to recompute the addition, if any, to be made to the total income of the assessee u/s 145A after making adjustment to the value of closing stock as well as opening stock. Ground No. 5 of the assessee's appeal is accordingly treated as allowed for statistical purposes. 50. As regards ground No. 3 of the assessee's appeal, it is observed that the issue ....
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....0405, it is observed that the issue involved therein relating to disallowance made out of foreign travel expenses is similar to the one involved in ground No. 1 of the Revenue's appeal for assessment year 2001-02 which has been decided by us in paragraph No. 7 of this order. Following our conclusion drawn in assessment year 2001-02, we uphold the impugned order of the learned CIT(Appeals) giving relief to the assessee on this issue and dismiss ground No. 1 of the Revenue's appeal. 54. In ground No. 4 of its appeal for assessment year 2004-05, the Revenue has challenged the action of the learned CIT(Appeals) in directing the AO not to reduce the municipal taxes from the rental income received by the assessee for the purpose of determining annual letting value of the concerned properties. As this issue involved in assessment year 2004-05 is similar to the one involved in ground No. 2 of the Revenue's appeal for A.Y. 2001-02 which has been decided by us in para No. 35 of this order, we follow our conclusion drawn in assessment year 2001-02 and uphold the impugned order of the learned CIT(Appeals) giving relief to the assessee on this issue. Ground No.&....
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....gned order of the learned CIT(Appeals) sustaining the disallowance made by the AO out of commission and brokerage expenses. Ground No. 3 of the assessee's appeal and ground No. 3 of the Revenue's appeal are accordingly dismissed. 59. Ground No. 4 of the assessee's appeal involves a common issue relating to disallowance made by the AO and sustained by the learned CIT(Appeals) out of common indirect expenses. As agreed by the learned representatives of both the sides, this issue as well as all the material facts relevant thereto as involved in assessment year 2005-06 are similar to assessment year 2001-02. We, therefore, follow our conclusion drawn on this issue in assessment year 2001-02 and uphold the impugned order of the learned CIT(Appeals) partly sustaining the disallowance made by the AO out of indirect common expenses. Ground No. 4 of the assessee's appeal is accordingly dismissed. 60. As regards ground No. 1 of the Revenue's appeal for assessment year 200506, it is observed that the issue involved therein relating to disallowance made out of foreign travel expenses is similar to the one involved in ground No. 1 of the Revenue's appeal for ....
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....on of the assessee thus was allowed and it was a fit case to reopen the assessment in view of Explanation 2 to section 147. He, therefore, upheld the validity of assessment made by the AO and rejected the stand taken by the assessee on this issue. 64. We have heard the arguments of both the sides on this issue and also perused the relevant material on record. As rightly held by the learned CIT(Appeals), the return originally filed by the assessee for the year under consideration having been accepted u/s 143(1), there was no occasion for the AO to express any opinion and it, therefore, cannot be said that it was a case of reopening of assessment based on a mere change of opinion. Moreover, in the assessments completed for the subsequent years, certain expenses claimed by the assessee were found to be not allowable as deduction while computing the income of the assessee. Since similar expenses were claimed by the assessee in the year under consideration and the same were allowed while processing the return of the assessee u/s 143(1), it was a prima facie case of allowing excess claim of the assessee for deduction of the said expenses which resulted in escapement of assessee's inco....
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.... directed against the order of learned CIT(Appeals)-XIX, Mumbai dated 14-11-2005. 69. In ground No. 1 of its appeal for assessment year 1998-99, the assessee has raised a preliminary issue challenging the validity of assessment made by the AO u/s 143(3) read with section 147. It is observed the issue involved in this ground is similar to the one involved in ground No. 1 of assessee's appeal for assessment year 1997-98 which has been decided by us in paragraph No. 64 of this order. Following our conclusion drawn in assessment year 1997-98, we uphold the impugned order of the learned CIT(Appeals) on this issue and dismiss ground No. 1 of the assessee's appeal. 70. Ground No. 2 of the assessee's appeal as well as ground No. 2 of the Revenue's appeal involve common issue relating to disallowance made by the AO out of commission and brokerage which has been sustained by the learned CIT(Appeals) partly. As agreed by the learned representatives of both the sides, this issue is similar to the one involved in ground No. 10 of the assessee's appeal and ground No. 4 of the Revenue's appeal for assessment year 2001-02 which has been decided by us i....
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....see on the ground that reopening of the assessment itself was bad in law. It was contended that all the material facts relevant for the purpose of assessment having been disclosed in the return of income originally filed, the reopening of the assessment by the AO was for mere change of opinion which was not permissible in law. The learned CIT(Appeals) did not find merit in this contention of the assessee. He held that the assessment was reopened by the AO after having found during the course of assessment proceedings for subsequent years that the assessee had claimed certain expenses in the year under consideration which were not allowable as deduction. He held that excessive claim of deduction of the assessee thus was allowed and it was a fit case to reopen the assessment in view of Explanation 2 to section 147. He, therefore, upheld the validity of assessment made by the AO and rejected the stand taken by the assessee on this issue. 75. We have heard the arguments of both the sides on this issue and also perused the relevant material on record. As rightly held by the learned CIT(Appeals), certain expenses claimed by the assessee were found to be not allowable as deduction in t....
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....2 of the Revenue's appeal are accordingly dismissed. 78. As regards ground No. 5 of the assessee's appeal, it is observed that the issue involved therein relating to disallowance of legal and professional charges made by the AO and sustained by the learned CIT(Appeals) is similar to the one involved in ground No. 9 of the assessee's appeal for assessment year 2001-02 which has been decided by us in paragraph No. 19 of this order. Following our conclusion drawn in assessment year 2001-02, we uphold the impugned order of the learned CIT(Appeals) sustaining the disallowance made by the AO on this issue and dismiss ground No. 5 of the assessee's appeal. 79. In ground No. 3 of its appeal for assessment year 1999-2000, the Revenue has challenged the action of the learned CIT(Appeals) in directing the AO not to reduce the municipal taxes from the rental income received by the assessee for the purpose of determining annual letting value of the concerned properties. As this issue involved in assessment year 1999-2000 is similar to the one involved in ground No. 2 of the Revenue's appeal for A.Y. 2001-02 which has been decided by us in para No. 35 of ....
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.... certain income which has escaped assessment and not for allowing the claim of deduction which has already been rejected and accepted by the appellant. The provisions of section 147 are for the benefit of the Revenue and not for the appellant. In that view of the matter also, the deduction claimed in the reassessment proceedings cannot be considered for allowance. The additional claim of the appellant made in the return filed in response to notice u/s 148 is therefore not tenable. This ground of appeal is rejected." 82. We have heard the arguments of both the sides on this issue and also perused the relevant material on record. It is observed that the claim of the assessee for deduction on account of gratuity expenditure was disallowed by the AO in the assessment originally completed u/s 143(3) vide an order dated 28-03-2002 and no appeal against the said order was preferred by the assessee. It was only during the course of reassessment proceedings that the assessee made an attempt to raise this issue by challenging the disallowance made in the original assessment on account of gratuity expenditure which was not entertained by the authorities below and in our opinion, quite righ....