TMI Blog1996 (3) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... below mentioned party: Name of the party from whom purchased Quantity Amount M/s Ganesh Industries, Rafaleshwar National Highway,, Morvi 500 Bags Rs. 58,000 2.1 The assessee-company is a private limited company engaged in the business of manufacture of oil, oil cake and other allied products. The basic material used for manufacture of aforesaid products are groundnut, groundnut oil cake and other seeds. 2.2 At the very outset, both the representatives of the parties invited our attention to the order passed by the Tribunal dt. 29th July, 1994 for the asst. yrs. 1983-84 and 1984-85 in assessee's own case (ITA Nos. 736 and 737/Ahd/1988 and ITA No. 1230/Ahd/1988) where the Tribunal has deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpected price variation, the available stocks in the West European Markets. He further submitted that this would enable the company to plan its export targets especially in relation to the type of extractions. The said director had visited foreign countries with due permission from the RBI. The learned counsel for the assessee further contended that the tour undertaken by the director of the assessee-company was entirely for the business purpose and the authorities below have wrongly disallowed the expenses incurred by the director of the assessee-company. Once the authorities below have accepted that Shri Bipin N. Patel, director of the assessee-company, visited the European countries in connection with business purposes, it was wholly unj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses incurred by the director while on foreign tour cannot hold to be business expenditure. In our opinion, the aforesaid reasoning and conclusions of the authorities below are not tenable in the eyes of law, as no specific item or instance of personal expenditure has been noted. Both the authorities below have gone on conjectures and surmises and the disallowance is made on probabilities. Moreover, the authorities below have also not pointed out any violation of r. 6D of the IT Rules, 1962. In this view of the matter, we are in agreement with the submission of the learned counsel for the assessee that there was no justification in making such ad hoc disallowance to the extent of 1/4th of the total tour expenditure without any basis. We, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, the AO observed that the amount of Rs. 33,000 was spent by the assessee towards meeting the expenses for the repairs of the roads in the area around the factory. The short question for determination before us is that as to whether the aforesaid expenditure is in the nature of capital or revenue expenditure. If it is in capital nature then deduction is not allowable; otherwise it is allowable. The assessee-company is engaged in the business of manufacture of oil, oil cake and other allied products and the raw-materials used for the manufacture of the aforesaid products are groundnut, groundnut oil cake and other seeds. The said expenditure was incurred by the assessee for the purpose of facilitating running of vehicles engaged for transp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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