TaxTMI 
TaxTMI 
1982 (1) TMI 90
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..... Export inspection fee 27,050 3. Foreign travelling 60,833 4. Foreign Postage 10,967 5. Telephone Bills (Foreign) 189 6. Export expenses 1,205 7. Export shipping expenses 14,07,605 8. Export procurement expenses 2,907 9. Exchange difference 10,658 10. Export and staff expenses (est) 36,000 11. Export packing and forwarding 9,90,657 Out of the above items, the ITO rejected the assessee's claim in respect of the items listed at Sr. Nos. 2 and 4 to 11 whereas in respect of the first item, i.e. commission to foreign agent, he disallowed the assessee's claim in respect of Rs. 67,954 which was paid in India to M/s. Mangalji Bhimji of Bombay on the plea that it was paid in India whereas in respect of the third item. i.e. foreign travelling, the ITO disallowed the assessee's claim of weighted deduction in respect of Rs. 4,000 only, to which the assessee agreed. 3. When the matter was carried by the assessee before the CIT (Appeals), he confirmed the finding of the ITO in respect of each of the above stated eleven items. While doing so, he confirmed the allowance in respect of foreign travelling except for Rs. 4,000, as done by the ITO and confirmed the disa....
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....of Special Benches decision of the Tribunal Bombay Benches in the case of M/s. J. Hem Chand & Co. ITA Nos. 3255 and 3330/76-77 dt. 17th June 1978 and on the basis of another Special Bench decision of the Tribunal (Delhi Benches) and the decision in the case of Eastman Industries, the assessee's total claim deserve to be allowed. The ld. Deptl. Rep., on the other hand, submitted that though he has instructions that the Special Bench decision in the case of J. Hem Chand & Co. has not been accepted by the revenue but he submitted that, according to the same or otherwise, the assessee's claim in respect of all the items projected before us deserve to be rejected. 6. After taking into consideration the rival submissions, before we adjudicate the issue we would like to observe that the Special Bench decision in the case of J.Hem chand & Co. has been accepted by the revenue as would be apparent from the following letter: "No. DAT/J-59/76 dated 26th February, 1979 Office of the CIT, Bombay. To all the IACs and ITOs in Bombay Sub: Export market Development Allowance u/s 35B of the IT Act (Effects of the Tribunal's decision in the case of J. Hem Chand & Co. (ITA Nos. 3255 and 3390/....
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....) rejecting the assessee's claim in respect of this item, Before we part with this issue, we would like to make on observation that the remark given against this item in the assessee's chart pertaining to ECGC was of no relevance as export inspection fee is quite different from ECGC. (c) Foreign postage Rs. 10,957 : In respect of foreign postage, the assessee in its chart observed that the ITO allowed a similar claim in respect of M/s. Eastman Industries. But if we peruse the Special Bench decision on this issue which is dealt in para 32 and finding of principle in earlier part of the said order, we are of the view that the assessee's claim in respect of foreign postage deserves to be accepted. (d) Telephone bills Rs. 189: On the basis of the principle laid down by the Special Bench, the assessee fails in respect of this items because it is not his case that these are foreign telephones. (e) Salaries of employees handling export business Rs. 1,01,638: Regarding this item we find that it was also raised in the form of additional ground being ground No. 2 as mentioned in the CIT (Appeals) order para 22 but the same was rejected vide para 37 of his order. In the light of the Spe....
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....ted deduction and the same shall be treated as disposed of in the light of our above finding given item-wise. 8. Grounds No. 4 in the assessee's appeal is in respect of disallowance of general expenses amounting to Rs. 13, 979 made out of the total sum of Rs. 60,988 spent of partner's travelling expenses. Perusal of record shows that the assessee was unable to file the details in respect of the said expenses and before us also the statement placed at page 5 of the assessee's compilation was filed but no bifurcation was available whatsoever about the assessee was fair enough to admit that these were on account of tips and there could not be any details for the same. In the absence of details, we are afraid we cannot interfere with the finding the CIT (Appeals). The disallowance of Rs. 13,979 is, therefore, confirmed. 9. The fifth ground of appeal is in respect of disallowances of Rs. 2,625 paid to the driver and disallowed by both the lower authorities. In respect of this contention, the assessee's counsel placed his reliance on the Special Bench decision of Amritsar Tribunal in the case of M/s. Jethu Mal Piare Lal. We are afraid the said decision would not come to the assessee'....
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....d the disallowance of the following items: "(i) Entertainment Expenses Rs. 3,163 (ii) Leave with wages 2,960 (iii) Puja expenses 1,571 (iv) Interest on deposits covered in the cash flow 7,200 (v) Out of travelling expenses 8,500" 13. The ld. Counsel for the assessee did not press the assessee's claim in respect of item No. (iv) above, i.e., in interest on deposits covered in the cash flow and the same as such is rejected and in that regard the action of the CIT (Appeals) is confirmed. 14. In respect of (i) entertainment expenses, he submitted that these are petty items and were spent on employees of the assessee. When we peruse the orders of the two lower authorities, we find that the assessee failed to substantiate that the said amount was spent on ordinary tea and coffee expenses of the staff and similarly he was unable to substantiate the same before us. Either from his own record or on the basis of customs also he was not able to substantiate the assessee's claim. The CIT (A) while disallowing the said amount placed his reliance on the Punjab and Haryana High Court decision in the case of CIT vs. Gheru Lal Bal Chand (1978) 111 ITR 134 (P&H). Sitting in Chandigarh,....