Law: Income Tax Act, 1922

Section: 13,10(4)(c)

(a) Income tax Act (XI of 1922)---S. 13 Assessee a joint venture of foreign contractors Stock depreciation Claim of stock depreciation in absence of stock cards or any other evidence thereof but supported by account books¬ Figures claimed indicated that same were worked out on same basis as they were not round figures Held, basis on which stock in hand is valued is part of method of accounting Market value of stock is assessed at close of accounting year and not in the mid of year ¬Stock value is either based on actual cost of closing stock or average cost of stocks purchased Assessee is allowed to write down stock when market value is less than its cost Allowance for future un-realised loss is also permissible Question whether figures claimed as stock depreciation were properly worked out, was a question of fact within competency of Tribunal which could not be disturbed by High Court in reference Tribunal's decision of allowing stock depreciation to assessee being in consonance with accounting system, held, was justified. Pandit Brothers v. Commissioner of Income tar, Delhi (1954) 26 I T R 159 ; Vijaya Traders v. Commissioner of Income tax, Mysore (1959) 74 I T R 0279 ; Kanga and Palklivala's Income tax, 7th Edn., pp. 877 78 and Commissioner of Income tax v. Messrs Eastern Services Ltd., Karachi 1984 P T D 11 ref. (b) Income tax Act (XI of 1922)-- S. 10(2)(xvi) Payments on account of salary or indemnity, held, being normal business expenditure in terms of S. 10(2) (xvi) were rightly allowed by Tribunal. (c) Income tax Act (XI of 1912)-- S. 10(4) (c) Payment to Social Benefit Scheme Provisions of S. 10(4)(c), held, not attracted Question whether a particular amount spent on welfare of labour force should be allowed or should not be allowed as a business expenditure was a question of fact within com¬petency of Tribunal in absence of any express prohibition by law. (d) Income-tax Act (XI of 1922) S. 10(4) (bb) Payment of charges on bank guarantee or a per¬formance bond could not be equated with payment of brokerage or commission referred to in S. 10(4) (bb) _ Payment of charges being normal business expenditure, in case of a building contract, held, was rightly…

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