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2010 (10) TMI 531 - HC - Income TaxDisallowance - Search and seizure - Capital or revenue expenditure - The Revenue has accepted the returns filed by the assessee in regard to the deposit made by most of the distributors except the eight distributors on the ground that those eight distributors are not at all doing any business and that they are the kith and kin of the directors of the assessee-company and some of them are retired employees and some of them are employees - Held that: amount of Rs. 90 lakhs shown in the "security deposit" towards bottles is fictitious in nature and that the findings of the Assessing Officer are based on facts and therefore the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal could not have reversed the well reasoned order of the Assessing Officer when no material is placed to show that really there was breakage of bottles, the deduction claimed under the said head in a sum of Rs. 3,98,012 has been wrongly claimed by the assessee - Held that: assessee has made a categorical statement that the income earned by those eight distributors is enjoyed by them only and the quantum of deposit would vary and depends upon the actual business of each of the distributor - But there is no prohibition under the law that an assessee-company cannot give its distribution either to the relatives of the directors or to its retired employees or to its employees - whether there is a deposit of Rs. 90 lakhs under the head "Security deposit" towards bottles and crates is a question of fact and not a question of law - Decided against the revenue
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