Income-tax---

----Additions---Where disallowance of expenses was without any relationship to facts of the case, Assessing Officer was riot justified to make additions---Mere tinkering for small amounts simply discourages an assessee from making endeavour to maintain proper and reliable accounts besides generating bad blood---When account merited acceptance, Assessing Officer must show large heartedness by accepting the results, whatever those be.

Shaukat Azim CA. for Appellant.

S. Roomi Shah, D.R. for Respondent.

Date of hearing: 8th July, 1991.

ORDER

A.A. ZUBERI, ACCOUNANT MEMBER; --This appeal has been filed at the instance of a company who operate Circuit Television System at Railway Stations and Parlour Cars etc. The appellant impugned order dated 26-2-1991 passed by the learned Commissioner (Appeals) Zone-I, Lahore, in respect of the assessment year 1989-90.

2. The learned Counsel explained that their receipts stood at Rs.7,17,196 which, after adjustment of direct expenses, at Rs.3,92,335, left G.P. at Rs.324,861 giving a rate of 42.52%. In addition, over-head expenses were claimed to return a loss of Rs-1,96,811. The assessing officer completed total income at Rs.1,17,787 by adding-back Rs.1,00,000 out of the direct expenses (claimed at Rs3,92,335) and Rs.25,000 out of Administrative and General Expenditure (claimed at Rs.4,26,694). The learned Commissioner reduced the disallowance out of Direct Expenses to Rs.25,000 and out of Administrative and General Expenditure to Rs.20,000. With this the Appellant is dissatisfied.

3. The learned Counsel demonstrated to us that the instances cited by the assessing officer to allege unverifiable expenses being supported by Kacha vouchers alone, aggregated lesser than more Rs.500 and that the instances in respect of Administrative and General Expenditure were even less than Rs.300. The learned D.R. could not rebut this position nor be could demonstrate before us that the disallowances (as made) were backed by exact calculations of the unproved or inadmissible items. Since the learned Commissioner has already held that the disallowances "obviously were without any relationship to the facts of the case," in our opinion there was no justification to retain these. We may observe that a mere tinkering for small amounts simply discourages an assessee from making endeavour to maintain proper and reliable accounts besides generating bad blood. When accounts merit acceptance, the assessing officer must show large heartedness by accepting the results, whatever these be. However, as observed above, we see no justification for the two add-backs as retained by the learned Commissioner at Rs.25,000, and Rs.20,000, hence unhesitatingly delete these. The appeal succeeds in consequence.

M.BA./1259/T Order accordingly.