TMI Blog1977 (3) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner is a partnership firm constituted under a deed of partnership dated May 1, 1971. A minor had been admitted to the benefits of the partnership. The petitioner had made an application under section 184 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for registration of the firm for the assessment year 1973-74. Following the decision of this court in Additional Commissioner of Income-tax v. Uttam Kumar Promod Kumar [1974] 97 ITR 730 (All), the Income-tax Officer, Circle-I (1), Kanpur, refused to grant registration to the firm under section 185 of the Act on the ground that the deed of partnership had not been signed by the guardian of the minor admitted to the benefits of partnership. Against the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration of the firm for the assessment year 1974-75 and that in case such registration is refused, the petitioner can file an appeal against such order to the Appellate Assistant Commissioner. Regarding the proposal of the Income-tax Officer to disallow certain cash payments made by the petitioner and to add back the amounts of such payments to its income, the learned standing counsel submitted that it is open to the petitioner to show cause against such proposal and that if the Income-tax Officer should disallow such payments, the petitioner can have recourse to the remedy by way of appeal to the Appellate Assistant Commissioner and further appeal to the Tribunal and ultimately a reference to this court under section 256 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Shri Sharma submitted that the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal would naturally follow the ruling of this court in U. P. Hardware Stores v. Commissioner of Income-tax [1976] 104 ITR 664 (All) and disallow those cash payments. He maintained that the decision of this court in U.P. Hardware Stores' case [1976] 104 ITR 664 (All) requires reconsideration, that such reconsideration can be done in this petition itself and that the petitioner should not be driven to the necessity of going through the tortuous process of successive appeals to the Appellate Assistant Commissioner and the Tribunal and a reference to this court under section 256 of the Act. We shall now briefly advert to the ruling of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel then urged that money spent on purchase of stock-in-trade, etc., represents circulating capital and cannot be included in the term 'expenditure' which means money spent away ........................... it cannot be disputed that the money invested in the purchases of stock-in-trade and raw materials represents circulating capital and such payments are not covered by any of the provisions contained in sections 30 to 43A. But the value of the stock-in-trade has to be taken into account while determining the gross profits under section 28 itself on principles of commercial accounting. It is no doubt true that the provisions contained in sections 30 to 43A sometimes may cause undue hardship to an assessee inasmuch as he might have to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainly be an expenditure. Deduction need not also be confined to section 37. In sub-section (3) that word has been used in its widest amplitude and the provisions of rule 6DD throw considerable light as to what exactly is meant to be the scope of sub-section (3)... The expenditure referred to in section 40A(3) of the Income-tax Act is not confined to expenditure that could be claimed as a deduction under section 37 and refers to any payment made by the assessee and taken into account in computing the total income under the provisions of the Act." The learned standing counsel maintained that the view taken by this court in U. P. Hardware Stores' case [1976] 104 ITR 664 (All) and by the Orissa High Court in Sajowanlal Jaiswal's case [1976] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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