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TMI Blog1983 (11) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. 3. On appeal before the CIT (A) it was contended on behalf of the assessee that the addition so made on a purely estimated basis ignoring the past record of the assessee could not be sustained. The CIT (A) after considering the submissions made before him as also going through the reasons given by the ITO for making addition of Rs. 18,762, held that the addition has been made in an arbitrary manner and accordingly he deleted the addition. 4. Against this order of the CIT (A) the Revenue has preferred the present appeal before us. The assessee has also raised a ground in the cross objection filed by it that on law as well as on the facts and in the circumstances of the case, the CIT (A) should have also held that the addition of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Therefore, the assessee cannot be said to be aggrieved by the order of the CIT (A). Hence the ground raised in the cross objection on this point it fit to be rejected. 6. The next ground in the Departmental appeal is that the CIT (A) erred in deleting the entire addition of Rs. 5,000 added by the ITO as entertainment expenses. The ITO disallowed Rs. 5,000 out of general charges claimed at Rs. 69,514. In doing so, the ITO found that out of Rs. 69,514 details of expenses amounting to Rs. 24,947 were lacking. We further found that the assessee claimed to have spent Rs. 10,811 for offering tea, cigarettes, etc., to its staff and business constituents. The ITO, therefore, came to the conclusion that the entire expenditure of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment expenditure. That being the position, we uphold that order of the CIT (A) on this point. 10. The next grievance in the Departmental appeal is that the CIT (A) erred in holding that the assessee was an industrial company within the meaning of s. 2(7)(c) of the Finance Act, 1978. The assessee also raised an identical ground in the cross objection that the CIT (A) should have held that the assessee company did not derived income of less than 51 per cent from manufacturing activities and, therefore, tax should have been directed to be charged at the rate of industrial company. 11. The ITO while computing the tax, treated the assessee not as an industrial company. On appeal, the CIT (A) held, inter alia, as under: "I have carefully p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant company is to be treated as an "Industrial Company". The ITO is, therefore, directed to verify from the records as to whether such income from manufacturing activities is in excess of 51 per cent of its total income in the relevant accounting year and, if this is the case, necessary rectification in the tax computation of the company is to be made by the ITO by applying the lower rates of tax incidence prescribed for Industrial Companies." 12. Before us it was contended by the ld. Departmental Representative that the CIT (A) was wrong in holding that in view of several judicial pronouncements the assessee-company was to be treated as industrial company. The ld. counsel for the assessee, on the other hand, referring to the cross obje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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