J.P. Bengra, (Vice-President) - (1.) THESE two cross appeals, against the order of the Commissioner of Income-tax (Appeals)-VI, Mumbai (S.K. Dasgupta) pertaining to the assessment year 1992-93, are being disposed of by this consolidated order, for the sake of convenience.
(2.) We shall first take up the appeal filed by the Revenue, in which the first ground urged reads as under : "On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in holding that the incidental expenses connected to tour should not be included while computing the disallowance under Rule 6D of the Income-tax Rules and thereby erred in deleting the addition of Rs. 1,17,475 made by the Assessing Officer." The learned Departmental Representative submitted that the conveyance, telephone and miscellaneous expenses incurred, have to be disallowed under Rule 6D of the Income-tax Rules, 1962. On the other hand, learned counsel for the assessee relied on the decision of the Calcutta High Court in the case of CIT v. Vidyut Metallics Ltd, [1993] 203 ITR 779. We have considered the rival submissions and have gone through the material available on record. We find that the Commissioner of Income-tax (Appeals), in his elaborate discussions in paragraphs 5 and 6 of his order, has mentioned that the issue of disallowance under Rule 6D of the Income-tax Rules has been considered by the Calcutta High Court in the case of Vidyut Metallics ltd. [1993] 203 ITR 779, wherein it was held that the restriction under Rule 6D should be confined only to expenses on stay and would not cover other expenses provided they are not personal in nature, and following that decision he deleted the addition. The learned Departmental Representative could not place any material to take a difference view in the matter. We, therefore, agree with the view taken by the Commissioner of Income-tax (Appeals) on this issue. This ground of the Revenue is accordingly rejected.
(3.) THE second ground raised by the Revenue reads as under : "On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in holding that the allocation of electricity expenses amounting to Rs. 4,33,630 for reducing the profit of Section 80-I unit made by the Assessing Officer should be restricted to Rs. 2 lakhs, disregarding the fact that the part of the electricity cost pertaining to machinery involved in the product was allocated by the Assessing Officer.";