Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Year in which deductible - Assessee incurred expenditure on certain items which was subsequently reimbursed by coal board - It used to debit the coal board's account in the year when expenditure was incurred and credit the account in year when it was reimbursed by coal board and balance was then written off and claimed as expenditure - Whether in view of fact that assessee had been maintaining account in respect of said expenditure consistently from year to year without any deviation, tribunal was justified in holding that assessee was maintaining regular method of accounting in respect of said expenditure and same was allowable as directed by it - Held, yes - Whether, on facts, tribunal was also justified in granting partial relief as per ceiling provided in relevant coal mine rules - Held, yes FACTS The assessee, a coal syndicate, incurred some expenditure on fire protection and stowing, which was later reimbursed by the Coal Board. The assessee maintained its accounts on the mercantile system, but used to debit the Coal Board's account in the year when expenditure was incurred and credit the account in the assessment year when the reimbursement was received, and the balance, if any, was written off. Accordingly, in the assessment year 1969-70, the assessee claimed deduction of certain amount spent for the above purposes in the assessment years 1964-65 to 1967-68, but reimbursed in the assessment year 1969-70, The ITO rejected its claim on the ground that the expenses did not actually pertain to the assessment year in question and that it was not disclosed why only a portion of the expenses was reimbursed by the Coal Board. He further held the expenditure to be unrelated to the business of the assessee. On appeal, the AAC held that the expenditure was revenue expenditure and the ITO not having disputed the actual expenditure, the entire expenditure was allowable. On appeal by the revenue, the Tribunal took the view that in view of the coal mines rules the AAC should not have allowed the entire claim but only to the extent of 15 per cent of the total expenses. It remitted the matter back to the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492