TMI Blog1979 (8) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the word ' expenditure ' used in section 40A(3) of the Income-tax Act does not cover expenditure on purchase of raw material ? " The assessee known as M/s. New Light Tin Manufacturing Company, Sonepat, is a firm engaged in the business activity of manufacturing certain articles from tin plates and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturing business, in addition to the quota allotted to him by the Government, from other quota-holders at a premium and that those quota-holders would not agree to accept payment by cheque or bank drafts as they were violating the law in not utilising their quota of tin plates for their own manufacturing business, was not considered satisfactory by the ITO for bringing the assessee's case with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 40A related only to those expenses, regarding which a question as to their deduction out of the gross profits arises. Taking this view of the matter, the Tribunal allowed the appeal and held the expenditure in question as allowable. The question of law referred to this court has already been dealt with in a judgment of this court in CIT v. Grewal Group of Industries [1977] 110 ITR 278. It has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court in the aforesaid case. Even, no authority to the contrary has been cited by the learned counsel for the assessee. For the reasons recorded above, the answer to the question is in the negative, i.e., in favour of the revenue and against the assessee. Since the Tribunal left certain points undecided, the matter may now be decided afresh in accordance with law. In the circumstances of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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