DINESH KUMAR GOEL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) ITA No. 790 of 2006 relates to the assessment year 1997 -98, which was admitted on the following substantial questions of law:

(2.) WHETHER the Income -tax Appellate Tribunal was correct in law in sustaining the disallowance of the claim of expenses of Rs. 11,68,905 under the head 'printing and stationery' on the ground that same was to be considered in the block assessment proceedings and not under Chapter XIV of the Income -tax Act, 1961?

(3.) BEING aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the CIT(A). It was contended that since genuineness of expenditure incurred had not been disputed, the Assessing Officer had erred in law in holding that the said expenditure incurred in the financial year 1996 -97 of Rs. 3,96,500 and Rs. 7,99,405 aggregating to Rs. 11,95,905 and of Rs. 18,99,255 under the two heads had to be allowed, as the assessee was following mercantile method of accounting and could not be disallowed. It was submitted that there was no justification to say that it had to be dealt with in block assessment and that in any case, it has not been allowed thereto. The CIT(A) obtained a remand report of the Assessing Officer on 16 -1 -2001, who confirmed that the amounts credited in the account of advertisers are genuine and were incurred for the services rendered. In other words, there was no dispute about the incurring of expenditure. The assessee furnished his comments on 31 -1 -2001 with submissions that the deductions claimed as aforesaid be directed to be allowed. The CIT(A), however, held that the expenditure incurred was since not ledgerized and thus could be a part of block assessment proceedings.