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2008 (7) TMI 362 - HC - Income TaxExpenditure u/s 37 – the assessee who is carrying on business as stevedoring, clearing and forwarding agents and is being assessed in the status of a firm. For the assessment year 1996-97, a sum of Rs. 32,32,601 was debited as stevedoring charges. On verifying these expenses claimed, it was found by the Assessing Officer that the assessee had produced certain self-made vouchers endorsed by the assessee’s own employees and that these were other than the regular salary and other allowances which itself was taxable under the provisions of the Act. AO, on the basis of absence of proper voucher disallowed Rs. 13,17,243 – Held that in order to ensure that work of handling goods are done within a reasonable time and to handle emergency operations of cargo handling beyond the working hours, such payments are made either through labour or workers’ union, cannot be considered to be either prohibited by law and further the assessee cannot be expected to take the receipt from individual workers or make payment by way of cheques. Expenditures are allowed to be deducted.
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