TMI Blog1998 (3) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 86,255 remained outstanding, after all the adjustments were made, to the credit of various customers who had initially made deposits with the assessee. The Assessing Officer added the above sum of Rs. 1,30,464 repelling the assessee's contention that the assessee's liability in respect of unclaimed/ unpaid credit balances did not cease by the assessee's unilateral act of writing back or transferring the same to the P/L A/c. and that the same does not constitute assessee's income chargeable to tax. The Assessing Officer observed that by writing back the amount in question the assessee has done nothing but appropriated the entire amount towards the cost of vehicles already sold. He also observed that this amount is otherwise also taxable under section 28(iv). The Assessing Officer also disallowed Rs. 86,946 on account of investment allowance under section 32A on account of leased out machinery. The Assessing Officer observed that the lease agreement, made on 22-3-84, became effective with effect from 1-4-84, i.e., after the end of the assessee's accounting period, could not be said that the machine was installed/used during accounting period relevant to the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to CIT v. Bennett Coleman Co. Ltd [1993] 201 ITR 1021/[1994] 73 Taxman 64 (Bom.) and contended that in that case the liability in question had been claimed as deduction in the earlier year when it arose, but in the instant case the said amount of deposits from customers was never claimed as deduction in the computation of total income for any earlier year. Regarding its chargeability under section 28(iv) he has contended that for that it is to be seen as to whether it is a perquisite. He has contended that this amount did not arise as perquisite in previous year relevant to the assessment year 1984-85. The ld. A.R. has refer-red to Palkhivala's commentary page 123, a copy of which has been furnished on record. In the said commentary he has emphasised marked by that the quantity and nature of a receipt for income-tax purposes is fixed once and for all when it is received. The unclaimed balances, when first received from the auction purchaser, were obviously liabilities, and no subsequent operation or alteration in the accounts could turn them into trading receipts. He has also referred to CIT v. Sandersons and Morgans [1970] 75 ITR 433 (Cal.), and contended that the unclaimed bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of this Hon'ble Supreme Court now no more remains a good law to be applied after the aforesaid decisions of the Hon'ble Supreme Court. 6. We have considered the rival contentions as also the materials placed on record, and have also gone through the cited decisions. In Perimisetti Seetharamamma's case the Hon'ble Supreme Court has laid down that where the case of the assessee is that a receipt did not f all within the taxing provision, the source of receipt is disclosed by the assessee and there is no dispute about the truth of this disclosure, the income-tax authorities are not entitled to raise an inference that the receipt is assessable to income-tax on the ground that the assessee has failed to lead all the evidence in support of his contention that it is not within the taxing provision. It has been held therein that 'in all cases in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision. Where however a receipt is of the nature of income, the burden of proving that it is not taxable, because it falls within an exemption provided by the Act, lies upon the assessee." In Sandersons and Mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce observing that the lease agreement was effective from 1-4-84 as per the first clause of the agreement and so it could not be said that the machine was installed/used during the accounting period relevant to the assessment year 1984-85. He has also contended that the Assessing Officer also observed that the machine was purchased only two days before the close of the accounting period and the terms of the lease became effective from 1-4-84, ie., after the end of the assessee's accounting period. He has also contended that although the lease agreement was effective with effect from 1-4-84, this is only for the purpose of rent meaning thereby that the rent will be available with effect from 1-4-84. He has contended that the lease agreement was effected within accounting period relevant to the assessment year 1984-85 inasmuch as the lease agreement was executed on 22-3-84 and the machine was also purchased on 29-3-84. He has contended that above dates of March, 1984 very much fall, within accounting period. He has also contended that the Assessing Officer has not followed the decision of Spl. Bench, ITAT, Madras, in the case of ITO v. First Leasing Co. of India Ltd [1985] 13 ITD 234. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. D.R. has contended that the Assessing Officer says that leasing is not the assessee's business. He has also contended that it appears that the argument regarding lease agreement was not advanced before the Assessing Officer. He has also contended that the machinery is said to have been purchased on 29-3-84 but the user of the same has not been established which is essential for investment allowance. He has also contended that clause (1) of the lease agreement also makes it clear that the period of lease, being of three years, starts from 1-4-84 and the rent is to be paid from 7th of every month. He has contended that if the machine is used from 29-3-84 itself then what about the rent of three days ie., from 29-3-84 to 1-4-84 ? He has contended that the emphatic question is also as to whether the assessee is doing leasing business? He has contended that the issue of year of allowance is also material in this case. He has also cited CIT v. Sivananda Colour Works [1996] 223 ITR 180/88 Taxman 554 (Mad.) 9. We have considered the rival contentions as also the materials placed on record and have also gone through the cited decision. Sivananda Colour Works' case cited by the ld. D. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r but it is only the installation of the same installation, to read harmoniously in the context, will no doubt spell out the situation of making the machinery/plant ready for use for manufacture/production, which having not already started, is to be started shortly afterwards, which is the legislative intent underlining the provisions of section 32A. As regards the condition stipulated in sub-section (2)(b) (ii) and (iii) of section 32A the new machinery or plant installed after 31st March, 1976 should be "for the purposes of business of manufacture or production' of any article or thing as contained in sub-clause (ii) in respect of a small scale industrial undertaking, and "for the propose of business of construction, manufacture or production,' of any article or thing, in respect of any other industrial undertaking as contained in sub-clause (iii). The expression 'for the purposes of' used above in sub-clauses (ii) and (iii) implies that the machinery or plant specified and mentioned in this provision should be of the aforesaid specified category. This also does not import into sub-section (1) a requirement by way of condition necessitating the commencement of actual user for man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. We order accordingly. 10. Ground No. 3 disputes the treating of Rs. 3,75,571 and Rs. 39,412 as sales promotion expenses, though claimed by the assessee as commission and brokerage. The ld. A.R. of the assessee has contended that the details of this computation is given on page 6 of assessment order and the disallowance has been made in second para on page 8 of assessment order. He has contended that the items of expenses mentioned at serial Nos. (i) and (ii) in the last para on-page 6 of the assessment order form part of ground No. 3. He has referred to last para on page 5 of the statement of facts and contended that though this expenditure is referred to as sales promotion but actually it is commission and brokerage and so the same deserves to be allowed. He has cited CIT v. Bata India Ltd [1993] 201 ITR 884 (Cal.) and CIT v. Hindusthan Motors Ltd [1991] 192 ITR 619 (Cal.) in his support. As against this, the ld. D.R. has relied on the orders of the authorities below. 11. We have considered the rival contentions as also the materials placed on record and also have gone through the cited decisions. in Bata India Ltd.'s case the Hon'ble Calcutta High Court has held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndry expenses' though under the head entertainment expenditure but it was not an entertainment expenditure and it was so wrongly written by their branch office. He has contended that in fact it was spent on staff that goes on tour, that is, working on outside duty. He has contended that the amount spent by the assessee for providing tiffin etc. to the staff working on outside duty was mentioned under sundry expenses and that the amount spent for providing tiffin to the staff within the working premises, that is, at the place of work, is mentioned separately. As against this, the ld. D.R. has supported the orders of the authorities below. He has Contended that though the assessee claims this amount to have been spent on staff for providing food and beverages to the employees on outside duty but the details are not available on record and no material furnished on record to substantiate the claim. 15. We have considered the rival contentions as also the materials placed on record. From the perusal of the record we find that a sum of Rs. 1,39,469 has been separately shown under the head 'sundry expenses' as expenses incurred on providing tiffin, tea etc. to the employees. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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