TMI Blog1992 (11) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of manufacturing plastic bags, that this new unit was subjected to trial run during the last month of the previous year, i.e. March 1985 and that the unit had made trial production. It was also stated that there was no commercial production started in this year and that the entire trial production had gone into waste. On the basis of this trial run in its new plastic unit at Sahibabad, the assessee had claimed the following items of expenditure and allowances as deduction in the computation of its business income for this year : (1) Expenses incurred for trial run including pre-commissioning expenses Rs. 19,26,081 (2) Depreciation on-- (a) Building Rs. 6,38,086 (b) Office equipments furniture Rs. 2,183 (c) Plant Machinery-- Normal depreciation Rs. 1,10,27,026 Additional Rs. 44,10,810 ----------------------- Total : Rs. 1,60,78,015 ----------------------- (3) Investment allowance of Rs. 1,46,98,738 The details of the trial run expenses claimed by the assessee were as follows :-- 1. Raw Material consumed Rs. 8,21,296.13 2. Wages/Establishment Rs. 42,865.75 3. Bank Charges Rs. 56,294.27 4. Transport Charges Rs. 4,42,456.07 5. Brokerage Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there could not be any profit from an industrial undertaking until there was commercial production of some items which could be sold in the market and that in the case of the present assessee, even during the so called trial run, there was no commercial production of any item. The I.T.O., therefore, held that the plant and machinery could not be considered to have been used for the purpose of business in such a trial run and that no depreciation or investment allowance was allowable on such basis. According to the I.T.O., the assessee had not conducted even the trial run and the plant and machinery were not utilised at all and that, therefore, the assessee's claim for depreciation allowance and investment allowance in respect of its plastic unit at Sahibabad could not be allowed as deductions. 4. Regarding the expenditure of Rs. 19,26,081, the I.T.O. held that it comprised of various items of expenditure, such as, pre-commissioning and trial run expenses, that as he had held that there was no trial run conducted during the year and so the expenses claimed on this account were completely false and bogus and that further the expenses of the nature of pre-commissioning expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness had been set up during a particular assessment year, even though there could be no commencement of commercial production, still the entitlement of the taxpayer to expenses incurred after setting up of business but before the commercial production as well as the deductions by way of depreciation, additional depreciation and investment allowance on the assets used in trial production of industrial unit, could not be denied during the said assessment year. The Commissioner held that in law, therefore, the assessee had to succeed in regard to the aforesaid claims of reliefs/deductions and also the expenses incurred on trial run of the plastic unit. In other words, the Commissioner held that the assessee would be eligible for relief by way of depreciation, additional depreciation and investment allowance on the assets of such unit employed in such trial production during the assessment year 1985-86. The Commissioner also agreed with the contention of the assessee's counsel that the plastic unit was after all a part of assessee's business which had several business activities, that it was an indivisible part of single business and was in the nature of diversification of existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional depreciation, Investment allowance and trial production expenses as claimed by the assessee. He argued that the materials that were relied on by the C.I.T. (Appeals) were not before the I.T.O. at the time of making the assessment and that, therefore, the Commissioner (Appeals) ought to have given one more opportunity to the I.T.O. to examine whether it was possible to run Generators and the factory with the diesel purchased by the assessee. Shri Tripathi submitted that as the matter has already been restored to the I.T.O. by the Commissioner for verification of the arithmetical accuracy of the claims put forward by the assessee, no prejudice would be caused to the assessee if the I.T.O. is given one more opportunity to examine these issues afresh before the assessee's claim was allowed. He pleaded that the various materials and pieces of evidence relied on by the C.I.T. (Appeals) in support of his conclusions were only records or documents maintained by the assessee to suit its own purpose and, therefore, they were self-serving evidence and shall be of no evidentiary value. He, therefore, strenuously urged that the department should be given one more opportunity to examine t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in the present case it was not the case of the I.T.O. that there was any such discrepancy noticed by him in the accounts maintained by the assessee for its trial production. He submitted that the entire reasoning of the I.T.O. to reject the assessee's claim was based on mere suspicion, surmises and conjectures, whereas the C.I.T. (Appeals) had examined the details and also put them to the I.T.O. who had nothing to say against them. He, therefore, argued that the Commissioner was fully justifted in accepting the assessee's contentions and in directing the I.T.O. to allow the assessee's claim for depreciation, additional depreciation, investment allowance and trial production expenses as indicated by the C.I.T. (Appeals). 11. Shri Poddar relied on the decision of the Madras High Court in the case of V. Ramakrishna Sons Ltd. where it was held that trial run was sufficient to allow the assessee's claim for development rebate. He further relied on the latest decision of the Calcutta High Court in Kanoria General Dealers Ltd.'s case where experimental production was held to be part of business. The learned counsel also relied on the decision of the Calcutta High Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rejected the claim of the assessee holding that the respondent could not be said to have been ready to commence business prior to May 1, 1965, the date on which it gave on leave and licence basis, a part of the building. On a reference, the Gujarat High Court reversed the decision of the Appellate Tribunal and allowed the respondent's claim for deduction holding that from October 1, 1964, the respondent could be said to have commenced its business activity, viz., to put the building accommodation and lands and gardens into proper shape and set up the appurtenant services so that the property could be given on leave and licence basis and that, therefore, the respondent had commenced business from October 1, 1964 and the expenses incurred thereafter were allowable as business expenditure. On further appeal by the Department, the Supreme Court affirmed the decision of the Gujarat High Court, (which is Sarabhai Management Corpn. Ltd. v. CIT [1976] 102 ITR 25), in the following words at page 153 of the reports :-- "However, the High Court has pointed out rightly, in our opinion, that, in this case, the Tribunal has proceeded on a misapprehension regarding the nature of the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Incheck Tyres Ltd. 17. The decision of the Madras High Court in V. Ramakrishna Sons Ltd.'s case is authority for the proposition that in order to obtain development rebate under section 33 of the Income-tax Act, 1961, what is required is that the plant or machinery after installation must be used or first put to use for the purpose of the assessee's business and the section does not require that even in the very year of installation or in the year of first user, the assessee must be carrying on the said business and that it is enough that the installation and the first user are for the purpose of the assessee's business. The facts of the case showed that the factory was run by the assessee on an experimental basis and some quantity of spun pipes was actually turned out from the machines which was held to be sufficient user for the business in order to qualify for the allowance of development rebate under section 33 in respect of the plant and machinery and also for the deduction of the expenses and losses incurred by the assessee year after year. 18. In Prem Conductors (P.) Ltd. v. CIT [1977] 108 ITR 654, the Gujarat High Court has held that for deciding when a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The first report was relevant for the period 9th June, 1961 to 24th June, 1961 and the report relevant to this period showed that the end-product obtained was hopelessly low in quality in securing any material result and, therefore, the said report must be read to indicate that almost nothing was obtained. It must be mentioned here that in the said case the assessee was in the business of production of ether. However, the next report for the period 19th August, 1961 to 11th September, 1961 gave a different picture which showed that some quantity of finished product was obtained though it was not proper standard of marketable quality. The Department argued before the Bombay High Court that this would not be sufficient to hold that the assessee had commenced production of ether in its factory. Rejecting this contention of the Department, the Bombay High Court held as follows at page 615 of the reports : "It is true that when the end-product obtained during this period was sent to the analysts, Italab Private Ltd., for analysis, it was opined by the laboratory that the sample did not comply with the prescribed standards of quality of B.P. test 1958 with respect to non-volatile ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional heads as follows : " Thereafter the details of the expenses under the 11 heads are set out which are the same as set out in the assessment order which we have already quoted in paragraph 2 above. At page 156, the Auditors have given a qualified report and one of the items of qualification in item No. 8 reads as follows :-- "(8) capitalisation of pre-commissioning expenses (including trial expenditure) of its plastic unit and provision for depreciation on the said Unit although no commercial production has been started during the period and the consequential impact as indicated in Note 7 of Schedule 'F'." There is no dispute that all these materials, viz., Auditor's report, final accounts and notes on accounts, were filed along with the return of income by the assessee. In fact, the ITO has relied on these materials only to reject the assessee's claim to hold that there is no expenditure claimed by the assessee for fuel consumption or for energy charges for running the trial production in its new factory at Sahibabad. It is this point made by the ITO that was sought to be met by the assessee before the CIT (Appeals) by pointing out that the ITO made no such enquiry in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 is attached". It would be noticed that the installed capacity per annum is shown as 30 million Nos. of HDPE/PP Woven Sacks against entry No. 5 which is above entry No. 6. On the next page monthwise production of bags from March 1985 to November 1985 is given. The total number of bags in March 1985 was 17,482. However, from April 1985, the production rose to 1,95,012 and thereafter gradually to 25,95,874 in September 1985. These details are referred to by the C.I.T. (Appeals) in his order. There can hardly be any dispute that these figures which have been furnished by the assessee to the Directorate General of Technical Development of the Govt. of India represent contemporaneous evidence which have been accepted by another wing of the Government of India concerned with the actual production of these plastic bags. Pages 46 and 48 of the paper book give the datewise production figures with particulars of raw materials consumed, wastage etc. from 1-3-1985 to 29-3-1985. We are unable to agree with the Revenue that these figure should not be accepted, because they are all self-serving documents. On the contrary, we find that the Department has not been able to find any discrepancy in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the I.T.O. anywhere to find that these facts are incorrect or that they are not true. 25. The only objection of the I.T.O., as pointed out by the C.I.T. (Appeals), was that there was no expenditure claimed for fuel consumption or energy consumption for running these machineries. For this also, the assessee has placed materials before the C.I.T. (Appeals) to establish that it has purchased two separate Generators which were received by it on 30-10-1984 and 12-11-1984, as could be seen from the receipts of the Raj Transport Co. for transport of these Generators from Delhi to Sahibabad. On page 33 of the assessee's paper book, full and complete particulars regarding the purchase of diesel of 24,000 ltrs. for Rs. 81,360 from two suppliers, Sangam Service Centre and Chemico (India), are furnished. There is no dispute about the genuineness of these purchases of diesel as they are properly supported by valid bills issued by the suppliers, copies of which are at pages 34 to 43 of the assessee's paper book. The assessee has also furnished separate Profit Loss Account and Balance Sheet as at 31st March, 1985 for this plastic unit at Sahibabad and filed the same with the I.T.O. in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption would be 21,538 ltrs. that there was sufficient diesel to account for the above consumption even granting that the same was not consumed wholly for plastic unit and that the diesel purchases of 24,000 ltrs. had been entered under miscellaneous items of purchases amounting in all to Rs. 2,26,498 and that the details of the same were furnished by the assessee. Again in paragraph 8, the Commissioner has specifically referred to the fact that all the materials that were produced before him by the assessee in the course of the appeal hearing were perused by the Assessing Officer as well and that they were further examined by him also. As a result of this examination of the various materials, the Commissioner came to the conclusion that there was nothing to controvert the assessee's claim that it had commenced its trial production in its plastic unit at Sahibabad during March 1985 relevant for the assessment year 1985-86, that on the only reason given by the I.T.O. for doubting the commencement of the trial production, viz., absence of expenses by way of fuel charges for operating the plant at Sahibabad also, it had been already found that such an assumption made by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Gujarat High Court in CIT v. Suhrid Geigy Ltd. [1982] 133 ITR 884. This argument of the Revenue was met by Shri Poddar, the assessee's learned counsel, by pointing out that this decision of the Gujarat High Court was contrary to the two decisions of the Calcutta High Court in the case of Incheck Tyres Ltd. and in Kanoria General Dealers (P) Ltd. and that further this decision was also contrary to other decisions of the Gujarat High Court in Hotel Alankar v. CIT [1982] 133 ITR 866 at page 877 and CIT v. Speciality Paper Ltd. [1982] 133 ITR 879. He further pointed out that the Supreme Court in the case of CWT v. Ramaraju Surgical Cotton Mills Ltd. [1967] 63 ITR 478 has approved the decision of the Bombay High Court in the case of Western India Vegetable Products Ltd. v. CIT [1954] 26 ITR 151. He therefore, argued that we should follow these decisions which are in favour of the assessee in preference to the decision of the Gujarat High Court judgment in the case of Suhrid Geigy Ltd. relied on by the learned Departmental Representative. 27. On the facts of the present case which we have discussed above, it would be clear that the assessee-company had not only set up its new plasti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's case. As rightly pointed out by the assessee's learned counsel, the decision of the Supreme Court in Ramaraju Surgical Cotton Mills Ltd.'s case fully supports the assessee's case. In this decision it has been held by the Supreme Court that a unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up and that it is only when the unit has been put into such a shape, that it can start functioning as a business or a manufacturing organisation that it can be said that the unit has been set up. Applying the above test to the facts of the present case, we are satisfied that the assessee-company had not only set up its new industrial unit for manufacturing plastic bags under the name "Paharpur Plastics" at Sahibabad in the year of account but also it commenced production of such plastic bags in the new industrial unit from March 1985 when it started its trial production in this new factory. We, therefore, respectfully follow these decisions which are in favour of the assessee and held that the CIT (Appeals) was right in directing the Assessing Officer to allow to the assessee-company depreciation, additional depreciation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company to its Directors and their close relatives and certain other concerns. The Commissioner held that the assessee-company had large reserves besides share capital and that the borrowings were much less as compared to the interest-free fund available in the business and that further the profit of the year before depreciation etc. itself was more than Four crores of rupees. The Commissioner, therefore, concluded that the advances thus had been given from interest-free funds including profits in the business and the concessional rate of interest collected thereon had no bearing on interest payments on borrowings made for business purposes. The Commissioner pointed out that under section 36(1)(iii) of the Act, all that was necessary was to prove that there was a borrowing by the tax-payer and that the same was for the purpose of the business carried on by the assessee-company. The Commissioner held that the ITO had not found that any portion of the borrowings on which the interest had been claimed by the assessee had, in fact, been diverted for making the advances to the close relatives of the Directors of the company or the associate concerns and that, therefore, the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces made by the assessee during the year under appeal. He, therefore, submitted that there was no diversion of borrowed moneys on interest by the assessee-company for non-business purposes as assumed by the Revenue to justify the disallowance of Rs. 10,49,077 made by the ITO. The learned counsel submitted that the assessee was entitled to this deduction on the authority of the decision of the Bombay High Court in the case of CIT v. Bombay Samachar Ltd. [1969] 74 ITR 723. He further relied on the findings of the Tribunal in paragraph 3 of the order of the Appellate Tribunal at pages 55 to 61 of his compilation in the case of two Directors of the assessee-company wherein the Tribunal had accepted the factual position that the loans and advances made to them by the company were out of its own funds and not out of borrowed funds about 15 years back and, therefore, it was held that there was no question of any perquisite allowed by the company to the Directors as held by the Calcutta High Court in the case of CIT v. P.R.S. Oberoi [1990] 183 ITR 103. Relying on these materials and decisions the learned counsel argued that there was no need or necessity for sending the matter back to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a pre-condition to commence or for the carrying on of a business ; it may comprehend many other acts incidental to the carrying on of the business but, however, wide the meaning of the expression may be, its limits are implicit in it : the purpose shall be for the purpose of business, that is to say, the expenditure incurred shall be for the carrying on of the business and the assessee shall incur it in his capacity as a person carrying on the business." 34. When we examine the facts of the present case in the light of the aforesaid principles laid down by the Supreme Court, we find that no portion of the borrowed funds of the assessee-company had been utilised for non-business purposes as assumed by the ITO for the purpose of making this addition. In fact, in the assessment order, the ITO himself accepts that the payment of interest to the extent of Rs. 10,49,077 was in the interest of the business and was, therefore, for the purpose of the business. The ITO's objection is that the assessee could have easily avoided the payment of this interest if it had not advanced the various loans and advances to the Managing Director and other Directors and their close relatives and thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, agree with the reasoning and conclusion of the CIT (Appeals) and confirm his order on this point by following the ratio of the decision of the Supreme Court in Madhav Prasad Jatia's case referred to above. Accordingly, this ground is rejected. 35. In ground No. 3, the Revenue objects to the order of the CIT (Appeals) directing the ITO to allow sales-tax etc. even if those amounts were actually paid after the expiry of the relevant previous year. According to the Revenue, this decision of the CIT (Appeals) is completely against the provisions of section 43B of the Income-tax Act, 1961. The ITO had disallowed a sum of Rs. 53,49,677 under section 43B of the Act. This amount represented West Bengal sales-tax Central sales-tax, turnover-tax, customs duty, Corporation tax, Bombay sales-tax, Faridabad sales-tax and excise duty as well as Provident fund contribution amounts. The CIT (Appeals) after examining the assessee's contentions in the light of the materials produced before him, held that the assessee's objections were well-founded. In respect of statutory liabilities like West Bengal sales-tax, Central sales-tax etc., CIT (Appeals) held that if they became due for discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that this order has been passed by the ITO after verifying the correctness of the assessee's claim that these amounts were paid within the statutory time limits as directed by the CIT (Appeals). On behalf of the Revenue, it was submitted by the learned Departmental Representative that as the decisions of the Calcutta and Patna High Courts have not become final, they want to keep this issue alive so that the matter can be taken up on further appeal to the Supreme Court. 37. In this ground, we are not concerned with the amount of Rs. 31,60,366 in respect of excise duty for which a separate ground is taken by the Revenue as ground No. 4 which we shall deal with separately. Regarding the other items, such as West Bengal sales-tax, Central sales-tax, Faridabad sales-tax and Provident Fund contribution of M. Swarup, the submissions of the learned counsel for the assesee are found to be correct from the order passed by the A.C.I.T. on 26-12-1988 at pages 62 to 64 of the assessee's compilation. There is no dispute that this issue is now concluded by the decision of the jurisdictional High Court. in the case of CIT v. Sri Jagannath Steel Corpn. [1991] 191 ITR 676 (Cal.). Respectfully f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Before the CIT (Appeals), the assessee's counsel had filed a detailed working according to which the assessee would be actually entitled to the deduction of the current year's liability for bonus paid in the next year amounting to Rs. 10,51,324.13 which would result in a further deduction of Rs. 6,98,498.48 in the year under appeal. For this, the assessee filed a reconciliation of its bonus account for the three accounting years from 1-11-1981 to 31-10-1982 relevant for the assessment year 1983-84, from 1-11-1982 to 1-1-1984 relevant for the assessment year 1984-85 and for the previous year 2-1-1984 to 31-3-1985 relevant for the assessment year 1985-86, copies of which are available at pages 66 to 68 of the assessee's paper book. He also placed before the Commissioner a statement showing bonus payments for these three years, copies of which are available at pages 69 and 70 of the assessee's paper book. After examining these materials, the Commisstoner held in paragraph 16 of his order that on the face of it the working filed by the assessee for the claim of the assessee appeared to be on the right lines and in conformity with the decisions in the appellate orders passed by him f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 84, 1984-85 and 1985-86 as there is no dispute about the principles on which bonus amount is to be allowed in each of these years. We, therefore, find no merit in the objections raised by the Revenue in this ground which is, accordingly, rejected. 41. In ground No. 6 the Revenue objects to the deletion of a sum of Rs. 77,830 by the CIT(A). This amount was disallowed by the ITO on the ground that it represented ex-gratia payments to the employees. The ITO held that the assessee was not under an obligation to pay this amount and, therefore, it could not be allowed as business expenditure. 42. The CIT(A) found that the genuineness of the expenditure was not disputed, that the amount of expenditure was also not excessive or unreasonable and that the expenditure was obviously incurred with a view to facilitating the smooth conduct of the assessee's business and based on past practice. He, therefore, held that the nature of the expenditure showed that it was wholly and exclusively laid out for the business purposes of the assessee. Accordingly he deleted this addition which is to be objected to by the Revenue in this ground. 43. The learned deptt. representative contended that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed this amount on the ground that the above payment was made by the assessee-company without getting any services in return and that the sole purpose of this payment in the name of labour charges made to the family concern of the directors was to divert the income from the hands of the assessee to the hands of the family members of the directors and the trusted employees and in that process reduce the quantum of tax. In other words, the ITO held that this payment was against bogus labour charges and hence could not be allowed as a deduction. The CIT (Appeals), however, disagreed with these findings of the ITO and deleted this addition for the detailed reasons discussed in paras 24 25 of his appellate order. This is being objected to by the Revenue before the Tribunal. 46. The learned deptt. representative relied on the findings of the ITO in the assessment order and pointed out that the assessee had failed to submit the details of the specific work/services rendered by Unifab Engineers for which it had paid these service charges during the course of assessment proceedings and that, therefore, the ITO was fully justified in disallowing this payment as bogus. He argued that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITO had examined the genuineness of the said partnership firm and came to the conclusion that there was a genuine firm carrying on the business in the name of Unifab Engineers and that it was entitled to registration tinder section 185(1)(a) of the IT Act. The ITO had also held in this assessment order that the main source of income of Unifab Engineers was from labour charges received from fabrication work done for M/s. Paharptir Cooling Towers Pvt. Ltd., the assessee herein. It is, therefore, clear that whatever objection the ITO had in his mind in this regard had been set at rest by these, orders passed by the ITO in the case of Unifab Engineers. Apart from the above, as rightly held by the CIT(A) the Revenue does not dispute the fact that the assessee-company had been manufacturing the various items, such as, balancing hub, gear case, drive shaft assembly, F. C. value assembly, permatower and GRP fan cylinder. The cost of manufacture of these items in the assessee's own factory and through Unifab Engineers is given at page 123 of the assessee's compilation. A perusal of this comparative chart shows that the assessee had considerably gained by giving these works to Unifab En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed by the assessee to fulfil the conditions laid down in rule 6DD(j) of the IT Rules. 51. Sri N. K. Poddar referred us to the particulars contained at pages 124 to 145 of the assessee's paper book and pointed out that the assessee had given full particulars regarding the various payments made to the six parties in cash in excess of Rs. 2,500 and also explained the circumstances in which it had to make such payments. He further submitted that there was no dispute about the genuineness of these payments or about the identity of these parties and the compelling circumstances in which the assessee had to make these payments in cash. He, therefore, submitted that the assessee's case was squarely covered by the decision of the Calcutta High Court in the case of Girdharilal Goenka v. CIT [1989] 179 ITR 122 and that, therefore, the order of the CIT(A) should be upheld. 52. We have looked into the particulars of these payments amounting to Rs. 47,926 contained at pages 124 to 145 of the assessee's paper book. In our view the only mistake committed by the CIT(A) was in considering the first payment of Rs. 20,000 only made to RK Associates and in not dealing with five other payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this payment under section 40A(3) was made purely on suspicion and surmises. 53. Similar is the position in regard to the next payment of Rs. 12,800 to M/s. Deshaparan Building Stores for purchase of cement on 14-8-1984. The full address of this party is available in the Bill and the assessee had to pay in cash as it had to purchase cement which was a scarce commodity at that time and as the seller insisted on payment of cash. 54. The third payment of Rs. 3,000 was to Sri Surat Hazra on 2-6-1984. He is said to be one of the employees of the assessee-company and this payment was made to him to enable him to go to Dehradun for erection of cooling towers of M/s. U.P. State Minerals. In other words it is a cash advance to an employee of the assessee-company for his travelling expenses. We are unable to see how this payment could be disallowed for invoking the provisions of section 40A(3) particularly when the full and complete particulars were available in the vouchers produced in support of the same, copies of which are at pages 133 134 of the paper book. 55. The fourth item of Rs. 6,625 was for the purchase of 5 tons of cement on 29-10-1984 from M/s. Inter Dominion Trading A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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