Law:

Section:

I. Section 80-I of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings, etc., after certain dates - Assessment years 1989-90 to 1994-95 - Assessee was engaged in making graphic art film of colour paper in jumbo rolls into marketable condition by process of slitting - Whether since there was no manufacturing or production of article or thing in process of slitting, assessee was not entitled to relief under section 80-I - Held, yes II. Section 40A(2) of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments - Assessment years 1989-90 to 1994-95 - Assessee entered into agreement with three firms to engage them as Marketing agents on sales commission basis - Assessing Officer observed that assessee paid higher commission to those agents than other concerns who rendered similar services and, accordingly, disallowed part of commission under section 40A(2) - However Tribunal found that expenditure incurred was reasonable expense towards its sole selling agency, having its own experienced working force and also outlets as agents throughout India, which had undoubtedly resulted in assessee's gaining in business and that there was no proof of excessive or, unreasonable payment - Whether since reasons recorded by Tribunal were based on material evidence, no disallowance could be made under section 40A(2) - Held, yes III. Section 143 of the Income-tax Act, 1961 - Assessment - Additions to income - Assessment years 1989-90 to 1994-95 - Pursuant to search conducted at factory and business premises of assessee, Assessing Officer made addition on account of undisclosed sale of scrap - It was found that scrap sales made by assessee were supported by invoices and they found a place in scrap register, which was inspected by sales-tax authorities - Further, there was no unaccounted cash by way of sale of scrap - Whether, on facts, Tribunal had rightly deleted addition made by Assessing Officer - Held, yes IV. Section 154 of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from records - Assessment years 1989-90 to 1994-95 - Assessing Officer processed assessee's return under section 143(1)(a),…

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