1996 (9) TMI 179 - AT - Income Tax

Summary

Issues Involved:
1. Disallowance of Rs. 4,000 out of travelling and conveyance expenses.
2. Disallowance of Rs. 1,500 out of staff welfare expenses.
3. Disallowance of 1/5th of car repairs and petrol expenses.
4. Jurisdiction of the Assessing Officer (AO) under Section 124 of the IT Act.
5. Legality of the assessment order under Section 143(3) due to non-determination of tax payable within the prescribed period.

Issue-wise Detailed Analysis:

1. Disallowance of Rs. 4,000 out of Travelling and Conveyance Expenses:
The assessee challenged the disallowance of Rs. 4,000 out of total travelling and conveyance expenses of Rs. 22,408. The Dy. CIT(A) upheld the AO's decision, stating that the expenses exceeded the permissible limit under Rule 6D. The assessee did not provide a detailed working of the expenses as required by Rule 6D, leading to the disallowance. The Tribunal found no mistake apparent from the record in the Dy. CIT(A)'s decision and upheld the disallowance.

2. Disallowance of Rs. 1,500 out of Staff Welfare Expenses:
The assessee contested the disallowance of Rs. 1,500 out of staff welfare expenses, arguing that these were not entertainment expenses. The Dy. CIT(A) partially agreed, reducing the disallowance but maintaining Rs. 1,500 due to unverifiable items. The Tribunal upheld this decision, noting that the Dy. CIT(A) had considered the details and applied relevant tests, and thus, there was no apparent mistake from the record.

3. Disallowance of 1/5th of Car Repairs and Petrol Expenses:
The AO disallowed 1/5th of car repairs and petrol expenses, suspecting personal use. The Dy. CIT(A) upheld this, referencing a similar decision by the Tribunal in the assessee's case for the assessment year 1981-82. The Tribunal found no error apparent from the record in this decision, noting the lack of a logbook and the personal use of the car.

4. Jurisdiction of the AO under Section 124 of the IT Act:
The assessee raised an additional ground challenging the AO's jurisdiction under Section 124, claiming the assessment order was void ab initio. The Tribunal held that questions of jurisdiction should be raised before the AO and determined by higher authorities as per Section 124(2). Since the assessee did not raise this during the assessment proceedings, the Tribunal refused to entertain this ground, citing statutory provisions and the timing of the objection.

5. Legality of the Assessment Order under Section 143(3):
The assessee argued that the assessment order was illegal as it did not determine the tax payable within the prescribed period. The Tribunal referred to the Supreme Court's decision in Kalyan Kumar Ray vs. CIT, which clarified that the computation of tax need not be on the same sheet as the assessment order. The Tribunal found that the AO had prepared a detailed tax calculation sheet (ITNS 193) on the same day as the assessment order, which was within the prescribed period. Hence, the Tribunal rejected the assessee's plea, affirming the legality and timeliness of the assessment order.

Conclusion:
The Tribunal dismissed the appeal, finding no mistakes apparent from the record in the Dy. CIT(A)'s decisions on the disallowances. The Tribunal also rejected the additional ground challenging the AO's jurisdiction and the legality of the assessment order, upholding the assessment's validity and compliance with statutory provisions. The appeal was dismissed in its entirety.