Manzoor Ahmed Bakhshi, Judicial Member - (1.)WE are disposing of this appeal of the revenue and the cross objection filed by the assessee by this consolidated order. The appeal of the revenue is directed against the order dated 30th August, 1989 of CIT(A)-IV, New Delhi and the dispute is relating to expenditure of Rs. 15,000 in respect of discontinued business. The respondent is a firm and had been engaged in the contract business. During the assessment year 1985-86 assessee had disclosed the income of Rs. 1,41,428 in respect of discontinued contract business resulting from arbitration award. The Assessing Officer disallowed the expenditure for two reasons. One is that vouchers but for payment of Rs. 15,000 paid to Mrs. Sudha Kapur, lawyer being daughter of one of the partners, had not been produced by the assessee to support the claim. The Assessing Officer also disallowed the claim on the ground that under Section 176(3A) the entire sum received was assessable to tax and there was no scope for allowing any deduction in respect of the income.
(2.)The learned CIT(A) observed that assessee had furnished confirmation from Mrs. Sudha Kapur in regard to the expenditure of Rs. 55,000 and if the Assessing Officer was dissatisfied with the evidence furnished he ought to have questioned Mrs. Sudha Kapur. The CIT(A) being of the view that deduction was wrongly denied to the assessee allowed the relief of Rs. 55,000 to the assessee being the expenditure incurred in connection with the award.
Revenue is aggrieved. The learned D.R. Shri Sandeep Tandon contended that under Section 176(3A) no deduction of expenses was permissible in respect of discontinued business. Shri Tandon relied upon the following authorities in support the contention that the expenditure in relation to discontinued business was not allowable as a deduction :

1. Joshi & Varma v. CIT [1979] 119 ITR 262 (Bom.)

2. CIT v. Lahore Electric Supply Co. Ltd. [1966] 60 ITR 1 (SC)

3. P.V. Gajapathi Raju v. CIT [1989] 176 ITR 238 (Mad.)

(3.)CIT v. Bankamal Naranjan Das Kaithal [1967] 65 ITR 33,7 (Punj.)