TMI Blog1994 (3) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... d been spent on gifts to VIPs and sum of Rs. 32,625 related to gifts in trade fair. The learned counsel has argued that certain gifts were given to foreign dignitaries during the International Trade Fair at New Delhi. He has, therefore, claimed that out of Rs. 48,133 sum of Rs. 37,102 must be allowed being the expenditure for the purpose of business. The main thrust of the argument of the learned counsel was, however, on a different ground. He has argued that the expenditure had been indeed incurred by the assessee-Corporation but it was reimbursed by the Punjab Govt. in subsequent years. He has invited our attention to the amount of Rs. 33,98,188 received by the assessee from the Punjab Govt. as the amount of reimbursement of exhibition expenses. This amount was received in next year and was shown as income at page 52 of the balance-sheet relating to the accounting year 1983-84, which was relevant to the asst. yr. 1985-86. The accounting period ended on 30th June, 1983 for the year under appeal. The second expenditure for which ground No. 3 has been raised related to the exhibition expenses amounting to Rs. 58,755 and anniversary expenses at Rs. 12,720. The third item related to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred in the year under appeal should be allowed as business expenditure. 5. We have considered the rival contentions and we find that in the absence of any direct link between the expenditure and the reimbursement, it will be difficult to accept the assessee's plea that the expenditure had been incurred so as to be reimbursed in future and that amount was to be actually reimbursed fully. As we have already seen, the assessee could have taken the amount of expenditure to the account of the Punjab Govt., rather than to the P L account, if the amount was actually required to be received from the Punjab Govt. by way of reimbursement. The very fact that the expenditure was to be reimbursed by the Punjab Govt. itself indicates that this was not an expenditure for the assessee's business. Therefore, the fact of reimbursement goes against the assessee and the expenditure cannot be held to be allowable. Since the expenditure as reimbursement have not been directly connected, it will be difficult to hold that the amounts in question were actually reimbursed in future. This new plea raised by the learned counsel does not appear to have been raised before the Revenue authorities. We, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat second proviso to s. 43B permitted deduction, if the amount was actually paid on or before the due date as defined in the Expln. below s. 36(1)(va). We, therefore, restore this issue regarding deduction under s. 43B to the file of the Assessing Officer with a direction to verify if the payment of sales-tax was made on or before the due date for filing of return and if the payment of provident fund contribution was made on or before the due date as defined in s. 36(1)(va). If, on verification, the payments are found to have been made on or before the respective due dates, as referred to in the respective provisions, the claim shall be allowed. The assessee's appeal stands partly allowed for statistics. 8. Now, we shall take up the Revenue's appeal. Ground No. 1 relates to the deletion of addition in respect of claim under s. 35B. The Assessing Officer noted that a sum of Rs. 26,930 had been spent on actual travelling to foreign countries and a sum of Rs. 51,367 had been spent on daily allowance. It was found that the air fare was incurred at Rs. 15,277 in respect of journey by two persons to Kuala Lumpur. This expenditure was held by the Assessing Officer to be allowable beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the preceding year, decided this question in the assessee's favour, following yet another order for the earlier year. Therefore, the learned counsel has argued that the matter stands concluded in the assessee's favour and is, therefore, a covered issue. The assessee showed a sum of Rs. 3,66,678 as interest income on said money on cash basis. Total amount of interest was Rs. 5,73,977. The CIT(A) allowed the assessee's claim that interest income after change of system of accounting could not be brought to tax on accrual basis. Looking to the facts of the case, we find that in the assessee's case, claim has been allowed in earlier two years and, therefore, taking a consistent view, we are not inclined to interfere with the CIT(A)'s order. Therefore, grounds Nos. 2 and 3 stand rejected. 10. Ground No.4 relates to deletion of addition of Rs. 4,56,814 on account of cash incentive for good work done by the employees. The Assessing Officer noted that the incentive bonus cash incentive had been paid, though certain amount as bonus was separately given to the employees under the Payment of Bonus Act, hereinafter called the said Act. It was noted that a sum of Rs. 3,63,003 as bonus and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment could not be held to be unreasonable. Looking to the entire facts of the case and keeping in view the observations made by the Hon'ble Supreme Court in the case of Shahzada Nand Sons, we find that the first appellate authority has gone into the question of liability and has found that the incentive bonus could be allowed within the meaning of s. 36(1)(ii). We, therefore, find that the requirement of proviso was fulfilled and it was allowed. Our attention has also been drawn to the Board's Circular No. 206 dt. 9th Aug., 1976, which permitted the payment of incentive bonus. It is also noted that the said Act did not prohibit payment of bonus beyond the minimum limit of 8.33%. The maximum limit provided in the said Act is 20%. We, therefore, find that ground No. 4 has no force and it is rejected. 11. Ground No. 5 is against the deletion of addition of Rs. 13,11,079. The assessee had received a sum of Rs. 13,25,635 as advance money against the allotment of plots. A sum of Rs. 14,556 was spent on the development of land. The Assessing Officer allowed deduction of expenditure and added the balance to the assessee's income. The assessee developed land and then sold the plots. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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