TMI Blog2006 (6) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... the action of the lower authorities in allowing deduction for Rs. 30,000 only as against the claim for collection charges to the tune of Rs. 71,701 ? Whether, on the facts and in the circumstances of the case, the Tribunal misdirected itself in law in being (basing?) its conclusions on irrelevant material and in ignoring other essential material on record ?" 2 The reference relates to year 1986-87. 3 Briefly stated the facts giving rise to the present reference are as follows: 4 The applicant is a firm deriving income from property representing godowns at Maliyana as well as from houses in Chiipi Tank and Kaiser ganj. The other income of the applicant-firm is from interest. 5 The applicant disclosed an annual letting valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the Assessing Officer. The Tribunal after consider the rival submissions on the above facts, in paragraph 5 of its order dated May 6, 1991, observed as under: "I have given my careful consideration to the rival submissions. I do not think there was necessity of 12 employees for collection work. To my mind these employees were engaged by the applicant for over all work connected with the godowns, such as, repairs, maintenance, taxes, banking work etc. The total claim made towards collection charges is Rs. 71,703. The Assessing Officer has already allowed 1/6 th towards repairs at Rs. 1,99,175. These employees will be supervising repairs of the godowns also. Supervision/charges of repairs are separately considered then the entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal. In support of his various pleas, he has relied upon the decisions of (i) Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 (SC); (ii) Ashok Kumar Rastogi v. CIT [1991] 55 Taxman 433 (All) and (iii) CIT v. Mahesh Chand [1993] 199 ITR 247 (All). 9 Shri A. N. Mahajan, learned standing counsel, on the other hand, submitted that the tax on rental statement, salary chart and the details of the collection expenditure were filed by the applicant before the assessing authority. No supporting documents were filed and that is why the assessing authority after discussing the entire issue had disallowed the expenditure towards collection charges on the ground that the sum of the expenditure amounting to Rs. 22,417 had been debited in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... works, does not suffer from any legal infirmity. The decisions relied upon by learned counsel for the applicant is of no assistance to the applicant inasmuch as in those cases, the employees were not employed for making the collection. The assessing authority is not entitled to make a pure guess but is supposed to make an assessment with reference to the evidence and material on record. It would not be applicable to a case where the only source of income of the applicant is in respect of income from house property. Further, in view of the findings recorded by the authorities including the Tribunal that the employees engaged by the applicant were not exclusively doing the work of collection of rent, the Tribunal, in our opinion, was justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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