B.V. Nagarathna, J.— This appeal is filed by the Revenue being aggrieved by the order passed by the Income Tax Appellate Tribunal, Bangalore Bench, in I. T. A. No. 670/Bang/2000, dated May 17, 2004.

2. The relevant facts of the case are that the respondent-assesses who is carrying on business as stevedoring, clearing and forwarding agents and is being assessed in the status of a firm. For the assessment year 1996-97, the assessee had filed return of income which was processed under Section 143(1)(a) of the Income Tax Act and with respect to profit and loss account a sum of Rs. 32,32,601 was debited as stevedoring charges. On verifying these expenses claimed, it was found by the Assessing Officer that the assessee had produced certain self-made vouchers endorsed by the assessee's own employees and that these were other than the regular salary and other allowances which itself was taxable under the provisions of the Act. Therefore, the Assessing Officer found that in the absence of proper vouchers expenses claimed by the assessee could not be allowed in respect of four items, viz.,

(Rs.)

(a) Incentive paid to dock w