TMI Blog2008 (2) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee filed its return on July 30, 1980, for the assessment year 1980-81 declaring an income of Rs. 21,97,794. The income of the assessee, however, was computed at Rs. 24,02,551 by the Assessing Officer vide assessment order dated March 15, 1983. 3. On the basis of the addition made by the Assessing Officer, he initiated proceedings for penalty and imposed a penalty of Rs. 7,10,155 under section 271(1)(c) of the Income-tax Act, 1961. 4 . In appeal by the assessee before the Commissioner of Income-tax (Appeals), the modification in the order concerning addition in two categories was made. However, the Commissioner of Income-tax held that the part of penalty was leviable. 5. Aggrieved thereby the assessee filed a second ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee vide letters dated October 17, 1982, January 27, 1983 and February 28, 1985 and three items of Rs. 2,500, Rs. 2,140 and Rs. 92,800 represented advances made to the advocate who had not submitted their bills. The distinction drawn by the Inspecting Assistant Commissioner (Assessment) in the penalty order between advances and expenditure was certainly technical. The disallowance was confirmed by the learned Commissioner (Appeals). The claim could not be said to be false. Moreover there was no such finding in the assessment proceedings. So far as the item of Rs. 5,34,967 out of salaries, wages and bonus is concerned, the assessee had given information vide letter dated October 17, 1982. The Inspecting Assistant Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned, the assessee had furnished details vide letter dated October 17, 1982. This disallowance was clearly a debatable claim. It was rightly held by the learned Commissioner (Appeals) to be a bona fide one. The next amount of Rs. 46,508 represented selling expenses. The assessee had filed the details with letter dated October 17, 1982. It showed that the amount in question was incurred on account of travelling, boarding and lodging of the representatives of various clients who visited the premises for inspection of the cables. This expenditure was treated as of the nature of entertainment and, therefore, disallowance was made under section 37(2A). Here also the claim could not be said to be other than bona fide or debatable. The next it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year 1981-82. The first item related to supplies on Singapore orders. The facts relating to these claims show that the claims were debatable though on the basis of the previous year ending on May 31, 1979. The claims were allowed only for the subsequent assessment year 1981-82. The finding of the learned Commissioner (Appeals) that these claims were false, is not sustainable on facts. This takes us to the last item, namely, Rs. 21,618 which represents the disallowance out of travelling expenses made under rule 6D. The assessee had given details, vide letter dated October 17, 1982, wherein the names of the employees and the amounts of expenditure incurred on each of them were detailed. Further details were filed by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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