1977 (10) TMI 44

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....ses of the assessee's business. The assessee firm has five partners, none of whom has personal conveyance. The total expenditure on the car has been Rs. 5,642 approximately. The disallowance works out to Rs. 2,821 only i.e. less than Rs. 250 per month. The user of the car for the personal purposes of the partners has not been denied. In the circumstances, the disallowance of Rs. 2,821 does not app....

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.... in fact penalty, but a kind of compensation paid in the course of the business and should, therefore, have been allowed as a legitimate business expenditure. The learned Departmental Representative urged that the expenditure in question was borne by the assessee not as a trader, but as a matter of penalty and that, therefore, it was not allowable. 3. After carefully examining the facts of the ....

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....pose of the assessee's business and that it should have been allowed in its entirety. On behalf of the Department, the order of the learned AAC is supported. 5. In our opinion, the disallowance made by the learned AAC is reasonable. The payments are not verifiable and, therefore, the learned AAC is justified in resorting to estimating the expenses, which could in the nature of the assessee's bu....