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Harak Chand Flour Mills Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Case No. 1 of 1979
Judge
Reported in(1981)21CTR(All)82; [1983]139ITR823(All); [1981]6TAXMAN232(All)
ActsIncome Tax Act, 1961 - Sections 37(1)
AppellantHarak Chand Flour Mills
RespondentCommissioner of Income-tax
Appellant AdvocatePradeep Kumar Agarwal, ;Ashok Kumar Agarwal and ;S.S. Shukla, Advs.
Respondent AdvocateP.N. Mathur, Adv.
Excerpt:
- .....to which the workmen were entitled. there is no categorical finding either of the aac or of the tribunal to indicate that the expenditure was not actually incurred. the very fact that a sum of rs. 1,000 was allowed by the aac indicates that the case of the assessee that food was supplied to workmen was not disbelieved. if 15 workmen were supplied food for a year, the expenditure of rs. 12,861 was not improbable. indeed, in the succeeding year, the ito allowed a sum of rs. 16,192'89 under this head. thus, the disallowance of rs. 12,861 is without any legal basis, nor is it based on a finding that the expenditure was not proved to have been incurred. accordingly, the question is answered in the affirmative in favour of the assessee who shall be entitled to rs. 200 as costs.
Judgment:

K.N. Goyal, J.

1. The following question of law has been referred to this court by the Tribunal:

'Whether, on the facts and in the circumstances of the case, the claim of assessee for a deduction of Rs. 11,861, being expenses incurred under the heading 'Food Expenses', was a permissible deduction from the income of the assessment year 1973-74 '

2. The relevant facts are that in the assessment year 1973-74, the asses-see had employed 53 employees in all, out of which 15 were from outside Sitapur. These 15 employees resided within the premises. It was said, on behalf of the assessee, that there were no adequate facilities available for them to procure their own food. It had, therefore, been agreed with them that food would be supplied to them by the assessee-employer. Accordingly, a sum of Rs. 12,861 was claimed as expenses. The ITO disallowed the claim in its entirety. The AAC allowed it in part to the extent of Rs. 1,000. The Tribunal has affirmed the order of the AAC.

3. We have heard learned counsel for the parties. If the assessee did supply food to these workers, the expenditure incurred on food would be treated as part of the wages as supply of food was a perquisite, to which the workmen were entitled. There is no categorical finding either of the AAC or of the Tribunal to indicate that the expenditure was not actually incurred. The very fact that a sum of Rs. 1,000 was allowed by the AAC indicates that the case of the assessee that food was supplied to workmen was not disbelieved. If 15 workmen were supplied food for a year, the expenditure of Rs. 12,861 was not improbable. Indeed, in the succeeding year, the ITO allowed a sum of Rs. 16,192'89 under this head. Thus, the disallowance of Rs. 12,861 is without any legal basis, nor is it based on a finding that the expenditure was not proved to have been incurred. Accordingly, the question is answered in the affirmative in favour of the assessee who shall be entitled to Rs. 200 as costs.


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