- (1.) BY THE COURT : On an application filed under S. 256(1) of the IT Act, 1961, Tribunal has referred the following questions for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that one-fifth of the motor car expenses amounting to Rs. 5,523 were not incurred for the purposes of the business of the company"? "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that telephone expenses amounting to Rs. 6,000 were not incurred for the purposes of the business of the company ?" "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the disallowance to the tune of Rs. 15,000 on account of excessive wastage of tin plates in the manufacturing of the containers was correct ?"
(2.) THE relevant assessment year is 1975-76. Assessee declared a loss of Rs. 41,11,260 on 1st Sept., 1975. During the course of assessment, AO noticed that motorcars were not used wholly and exclusively for the purpose of business, therefore, he disallowed Rs. 13,074. By the Tribunal that disallowance has been reduced to Rs. 5,523. The next issue relates to disallowance of Rs. 6,000. Assessee claimed total expenses on telephone to the tune of Rs. 1,21,601. Finally that disallowance has been reduced to Rs. 6,000 by the Tribunal.
(3.) THE third issued relates to disallowance of Rs. 15,000 on account of excessive wastage of tin plates in the manufacturing of tin containers. The AO worked out the wastage @ 8.6 per cent and disallowed Rs. 44,536. By the Tribunal that disallowance has been reduced to Rs. 15,000.;