1994 (10) TMI 95

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....), however, deleted the disallowance on the ground that the liability with regard to these expenses was settled during the year relevant to asst. yr. 1986-87. 3. The learned Departmental Representative submitted that the assessee was maintaining its books of account on mercantile basis and hence the expenditure pertaining to earlier years could not be considered as a charge on the profits for the year under consideration. 4. Shri Hari Om Arora, the learned counsel for the assessee, strongly supported the impugned order. 5. After carefully considering the submissions of the parties, we uphold the order of the learned CIT(A) because the liability of the expenditure claimed was settled in the year under consideration. 6. In the res....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lowance of Rs. 3,000 upheld by the learned CIT(A) is, therefore, deleted. 9. The only other effective ground is against the confirmation of disallowance of Rs. 9,158. Brief facts in this regard are these. The assessee had done spinning work for Sadhoushi Woollen Mills in the immediately preceding year and the raw material received was 1915.7 kg. The yarn produced and delivered to the said party was 1590.4 kg. The waste came to 325.3 kg. M/s Sadhoushi Woollen Mills did not accept the excessive wastage and accepted it only to the extent of 10% which came to 119.57 kg. The remaining wastage of 133.8 kg was taken by the assessee and the amount of Rs. 9,158 which was receivable by the assessee as fabrication charges from M/s Sadhoushi Woollen....