TaxTMI 
TaxTMI 
1990 (1) TMI 93
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....t of assets for the purposes of depreciation and investment allowance. He submitted that the assessee itself gave the allocation of the amount of subsidy received with reference to different assets which clearly indicates that the amount of subsidy was given directly or indirectly for meeting the cost of assets by the Government. 3. The learned counsel for the assessee contended that this point is fully covered by various decisions of the Tribunal and also by the judgments of various High Courts in favour of the assessee. He relied upon the following judgments : 1. CIT v. Godavari Plywoods Ltd. [1987] 168 ITR 632/33 Taxman 505 (AP) 2. CIT v. Bhandari Capacitors (P.) Ltd. [1987] 168 ITR 647(MP) 3. CIT v. Diamond Dies Mfg. Corpn. Ltd. [1988] 172 ITR 655/40 Taxman 34 (Kar.) 4. CIT v. Relish Foods [1990] 180 ITR 454 (Ker.) 5. CIT v. Steel Tubes of India Ltd. [1990] 181 ITR 90/44 Taxman 266 (MP) 4. We have examined the rival submissions and have gone through the various judgments cited by the learned counsel. The various Benches of the Tribunal throughout the country have consistently been taking the view that central subsidy has been granted for ensuring the gro....
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....so erred in accepting the same without even giving any opportunity to the assessing authority to examine such additional evidence and to cross-examine the concerned persons or to submit evidence in rebuttal thereof. It was contended that such additional evidence has been entertained and accepted in violation of specific rule 46-A of I.T. Rules, 1962. He, therefore, urged that the deletion of aforesaid disallowance made by the CIT (A) may be cancelled in the alternative the matter may be restored back to the IAC (A) or to the CIT (A) to redecide the same after giving reasonable opportunity to the assessing authority with respect to additional evidence submitted by the assessee. 6. The learned counsel for the assessee strongly objected to the aforesaid submissions made by the learned D.R. with regard to additional evidence entertained by the CIT (A). He pointed out that the revenue has not taken any such ground in the grounds of appeal submitted before the Tribunal. In the absence of any specific ground, the learned D.R. cannot validly challenge the entertainability of the additional evidence by the CIT (A). He pointed out that the return of income in this case was submitted on 27....
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....as received by it. It was under these circumstances that the assessee was compelled to submit additional material in support of allowability of the entire amount of foreign travelling expenses before the learned CIT (A). The learned counsel submitted that the CIT (A) was fully justified in entertaining the additional material in order to properly examine and consider the question relating to foreign travel expenses. He invited our attention towards the judgment of Hon'ble Gujarat High Court in the cases of CIT v. Motilal Hirabhai Spg. & Wvg. Co. Ltd. [1978] 113 ITR 173 and Pari Mangaldas Girdhardas v. CIT [1977] CTR (Guj.) 647 to support his contention that additional evidence has rightly been entertained by the CIT (A) and the omission to record reasons for entertaining additional evidence does not in any manner support the revenue's contention especially because no specific ground of appeal has been taken by the revenue challenging the fact of additional evidence entertained by the CIT (A). The learned counsel submitted that the assessee is one of the leading companies and has submitted a return declaring an income of more than Rs. 72 lakhs. This fact itself should have convinced....
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....fact that his wife accompanied him in the two foreign trips cannot by itself justify the disallowance of 50% of the travelling expenses incurred in respect of his foreign trips which were wholly and exclusively undertaken for business purposes of the company. It was pointed out that complete details of such foreign travelling expenses, result of export promotion tour of Shri V. Somani and report given by Shri Somani were placed before the assessing authority and any disallowance out of his travelling expeenses was apparently unjustified and invalid. The CIT (A) has, therefore, rightly deleted the disallowance made out of travelling expenses on foreign trips made by Shri Somani.The learned counsel thus strongly supported the order passed by the CIT (A) in which he has deleted the entire disallowance made out of foreign tour expenses. 7. We have carefully examined the rival submissions and have also gone through the orders passed by the learned authorities below. We have also gone through the various documents to which our attention was drawn by the learned representatives. The learned D.R. has not controverted the fact that during the course of assessment proceedings a query lett....
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....omani be and is hereby appointed as Honorary Exports and Plublic Relations Adviser, with effect from the date of this meeting. As Shri Vikram Somani is interested in this resolution as husband of Smt. Smiti Somani, did not participate in the resolution. " The aforesaid resolution clearly reveals that at the time when the ceramic division of the company was near the stage of completion, it was decided by the Board of Directors to avail the expert services of Smt. Somani in the area of export of ceramic products of their new ceramic division and also in the area of public relations. Before considering the validity of the findings given by the CIT (A) deleting the entire disallowance made out of foreign trip expenses, let us consider the contention of the learned D.R. that the CIT (A) has erred in entertaining the additional evidence. The circumstances under which the additional evidence and supporting material was submitted by the assessee before the CIT (A) have been explained here in before. Since the disallowance was made by the assessing authority without raising specific queries and without indicating any disbelief or suspicion about the non-allowability of foreign travell....
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....esolution confirms her expertise knowledge, experience and qualifications which was useful for the new ceramic division of the company. The resolution passed in the year 1979 clearly establishes that the foreign trips of Smt. Somani were made for business purposes of the company and were made in order to promote the exports of the ceramic products of the company. The law makers have introduced various provisions providing for incentives in the I.T. Act for promotion of exports and also for growth of industries in the notified backward areas. The Government has given subsidy of more than 23 lakhs for setting up of the aforesaid ceramic division by the assessee-company in the backward area. The ceramic division of the company was undergoing its infant stage and the said unit had to compete with various otter industries dealing in similar goods. The company opted to open new market by going for different designs, shapes and colour of various types of sanitary-wares which are normally used in bathrooms, toilet and kitchen. It was stated that Smt. Somani who had done interior decoration course rendered very useful service in selecting such colours and designs of the company's products. ....
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....of setting up of industries in notified backward area and which is also engaged in exporting its products to foreign countries should be trusted with regard to such expenses incurred in connection with foreign travelling unless there is any specific and positive material justifying any disallowance out of such expenses. The learned D.R. has not disputed the submission made by the learned counsel that details of foreign travelling account giving separately and distinctly the details of expenditure incurred in relation to foreign trips of Smt. Somani were given to the assessing authority. If the IAC (A) was not satisfied about the allowability of such expenditure, he should have specifically required the assessee to submit further evidence in support of its allowability or he should have examined Smt. Somani for deciding the question of allowability of such expenditure. Instead of doing all this he observed in the assessment order that the assessee has attempted to conceal the particulars relating to foreign travelling expenses incurred in connection with the foreign trips of Smt. Somani. It has further not been pointed out by the learned assessing authority that the expenses incurre....