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Laxmi NaraIn Chunni Lal Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference Application No. 40 of 1982
Judge
Reported in[1983]140ITR837(All)
ActsIncome Tax Act, 1961 - Sections 37, 145(1), 145(2), 256(1) and 256(2)
AppellantLaxmi NaraIn Chunni Lal
RespondentCommissioner of Income-tax
Appellant AdvocateR.K. Gulati, Adv.
Respondent AdvocateM. Katju, Adv.
Excerpt:
- - the rejection of accounts as well as the addition of these amounts were upheld on appeal by the aac as also on further appeal by the income-tax appellate tribunal......of these amounts were upheld on appeal by the aac as also on further appeal by the income-tax appellate tribunal. 2. apart from this, the assessee had claimed an expenditure of rs. 7,439 on messing. the ito disallowed that expenditure and added back the same to the income, but did not give any specific reason for doing so. before the aac it was contended that these expenses were not entertainment expenses and should have been allowed in full. the aac, following the decisions of this court in brij raman dass & sons v. cit : [1976]104itr541(all) and in cit v. manoo ram ram karan dass : [1979]116itr606(all) , held that these expenses were in the nature of entertainment expenses and the same had to be disallowed. the appellate tribunal confirmed the disallowance for the reason that the.....
Judgment:

Rastogi, J.

1. M/s. Laxmi Narain Chunni Lal, a partnership firm (hereinafter ' the assessee '), has filed this application under Section 256(2) of the I.T. Act, 1961 (hereinafter ' the Act '). The assessee carries on business in foodgrains and oil mills and maintains two sets of account books, one for the head office at Sidhauli and the other for branch at Varanasi. For the assessment year 1975-76, the accounting period ending Diwali 1974, the ITO rejected the books of account of both the sets and, applyingthe proviso to Section 145 of the Act, made an addition of Rs. 10,300 in the head office in respect of mobil oil and of Rs. 46,544 in the branch office. This amount of Rs. 46,544 was comprised of the sum of Rs. 26,544 for shortage in Kesari Dal account and Rs. 20,000 for unverifiability of purchases, sales, etc. The rejection of accounts as well as the addition of these amounts were upheld on appeal by the AAC as also on further appeal by the Income-tax Appellate Tribunal.

2. Apart from this, the assessee had claimed an expenditure of Rs. 7,439 on messing. The ITO disallowed that expenditure and added back the same to the income, but did not give any specific reason for doing so. Before the AAC it was contended that these expenses were not entertainment expenses and should have been allowed in full. The AAC, following the decisions of this court in Brij Raman Dass & Sons v. CIT : [1976]104ITR541(All) and in CIT v. Manoo Ram Ram Karan Dass : [1979]116ITR606(All) , held that these expenses were in the nature of entertainment expenses and the same had to be disallowed. The Appellate Tribunal confirmed the disallowance for the reason that the details of these expenses were not available and in the absence of any evidence the nature of the expenses could not be ascertained.

3. The assessee's application under Section 256(1) having been rejected by the Tribunal, it has filed the present application before this court.

4. Questions Nos. 1 to 8, proposed in the application, arise out of the finding given by the Revenue authorities and the Appellate Tribunal on rejection of accounts and additions in trading accounts. We find that the findings are based on the material on record. These are pure findings of fact and do not give rise to any question of law. The mere fact that the accounts could, if at all, be rejected under Section 145(2) while they have been rejected under the proviso to Sub-section (1) of that section would not, in our opinion, raise any statable question of law when we find that the finding in regard to the rejection of accounts is based on a consideration of the material on record.

5. Questions Nos. 9 to 12 relate to disallowance of the messing expenses claimed at Rs. 7,439. In this behalf the following question of law does arise :

' Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the messing expenses claimed at Rs. 7,439 could not be treated as an allowable deduction '

6. We, therefore, allow this application in part and direct the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, to draw up a statement of the case and refer the question indicated above for the opinion of this court. In the circumstances, we make no order as to costs.


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