TMI Blog1998 (12) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... Leave Travel Assistance of ₹ 5,61,033. 4. The relevant facts, relating to this issue, are that the assessee is maintaining the books of account on mercantile basis. It has a scheme of Leave Travel Assistance for its employees. In the employment contract itself, a sample of which has been shown to us, the assessee agreed to pay Leave Travel Assistance to the employees at mutually agreed rates. However, for the purpose of giving maximum tax benefit to the employees, the assessee allows the LTA in such a manner so that the benefit of section 10(5)(ii)(a) of the Income-tax Act, 1961, read with rule 28 of the Income-tax Rules, could be obtained. The assessee in its books of account provided for the liability on account of LTA on accrua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nying the deduction to the assessee in the year under appeal. 6. The learned Departmental Representative, on the other hand, relied upon the order of the CIT(A) and pleaded that the decisions referred to in the said order may be considered in deciding the issue. 7. We have given our careful consideration to the rival contentions. The CIT(A) has relied upon the decision of the Bombay High Court in the case of CIT v. Rajkumar Mills Ltd. (1971) 80 ITR 244. However, on the facts and in the circumstances of this case, we find that the aforementioned decision is inapplicable. As per the appointment letters issued to the employees, the assessee undertakes to pay the LTA to the employees at a pre-determined rate. As per the scheme, once the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to pay the LTA is incurred by the end of the previous year and the assessee maintaining its books of account on mercantile basis, was justified in making a provision on account of LTA. The system of accounting of the assessee has been accepted in the past. For assessment year 1985-86 also the CIT(A) has decided the issue in favour of the assessee and revenue has accepted the said decision. It has been argued before us that each year is an independent unit of assessment and therefore there is no bar for taking a different view in a subsequent year. Well, that principle is not disputed. However, when a method of accounting has been regularly followed by the assessee and it has been accepted by the revenue authorities, a strong burden li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfronted, with this information. However, the assessee could also not furnish information about M/s. Rajesh Agencies on the ground that they seem to have shifted from that place of business. The Assessing Officer disallowed the claim as not genuine and the CIT(A) has confirmed the disallowance. 9. The learned counsel for the assessee contended that the assessee had furnished necessary evidence in support of the claim which has not been established to be bogus. It was further contended that the mere fact that the party, after several years, was not found at the place of business/given address, does not establish that the evidence furnished by the assessee was unreliable. It is quite possible that the party shifted the place of business a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the party, viz. M/s. Rajesh Agencies, was not existing at the given address. In our view, the mere fact M/s. Rajesh Agencies was not found existing at the given address, does not automatically establish that no such party existed at the relevant point of time. The Assessing Officer has failed to make enquiries as to whether M/s. Rajesh Agencies existed at the relevant point of time, that is the year in which the payment of commission is claimed to have been made. If the Assessing Officer had collected material to establish that the party, viz. M/s. Rajesh Agencies, did not exist at the relevant point of time, then the obvious conclusion would be that the evidence furnished by the assessee was unreliable. But in this case the enquiry by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Karnataka High Court in the case of CIT v. Electronics Research Industries (P.) Ltd. (1991) 192 ITR 20/59 Taxman 46 in support of the contention. 16. Whereas the view canvassed on behalf of the assessee is supported by the aforementioned decision of the Karnataka High Court, no contrary decision has been brought to our notice. We therefore respectfully following the said decision, dismiss this ground of appeal raised by the revenue. 17. The second ground of appeal is relating to the grant of investment allowance on the cost of computer installed in the factory. 18. The learned counsel for the assessee supported the decision of the CIT(A) by the decision of the Calcutta High Court in the case of CIT v. Fort Gloster Industries Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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