TMI Blog1998 (1) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Officer to allow the expenditure ? (ii) Whether, on the facts and in the circumstances of the case, did the Tribunal have any material before it to come to the conclusion that the expenditure had been incurred ? The Appellate Tribunal, in compliance with the directions given by the High Court, referred the above disputed questions for the opinion of this court. The facts, as stated in the statement of the case by the Appellate Tribunal, are that the assessee-a registered firm engaged in the business of transportation-undertook contracts with the Kerala State Civil Supplies Corporation for transporting sugar. The assessee executed the contract by using its own lorries and also vehicles taken on hire. Every month, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r months and, therefore, the lorry hire expenses incurred during January and March, 1982, be also allowed. The Assessing Officer, however, took the view that no evidence, in support of the expenditure of ₹ 9,31,920, was adduced by the assessee and, therefore, he declined to allow deduction in respect of the expenditure of ₹ 9,31,920. On appeal, the Commissioner of Income-tax (Appeals) has stated as follows : . . . At the time of hearing of the appeal, I put a specific question to the learned representative of the appellant as to what evidence was available with the assessee to prove that these expenses amounting to ₹ 9,31,920 were actually incurred by the appellant as hire charges against the two bills amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate at which the expenditure is claimed is excessive compared to the other ten months, then, perhaps the Department might say that the claim is excessive. There is no such case made out. Thus we do not see why the assessee should not be allowed a deduction on account of the expenditure. Income-tax is only a tax on income. It is not a tax on gross receipts. We would, therefore, direct the Income-tax Officer to allow the expenditure. We agree with the broad approach of the Appellate Tribunal that when the gross receipt of ₹ 7,40,747 is brought to tax, then the corresponding expenditure should be allowed. It is difficult to accept that the gross income of ₹ 7,40,747 was earned without incurring any expenditure. If that be so, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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