captioned appeal by Revenue and cross objection by assessee being inter-connected may be disposed of by common order. In appeal filed by Revenue, following objection has been raised against order of AAC: "On facts and in circumstances of case, AAC has erred in directing ITO to charge interest under s. 189 (8) by treating firm as RF by completely ignoring clear provisions of law contained in Expln. 2 to provisions of sub-s. 8 of s. 139." While Smt. Manjari Kakkar, ld. departmental representative has submitted that interest under s. 139(8) had been rightly charged by ITO by treating assessee as Unregistered Firm, it has been vehemently contended by Shri K.R. Manjani, ld. authorised counsel of assessee that order passed by AAC was justified. Mr. Manjani has first of all submitted that view taken by AAC being in accordance with decision of Hon'ble Karnataka High Court in Addl. CIT vs. Mahadeshwara Lorry Service (1980) 18 CTR (Kar) 147: (1981) 129 ITR 516 (Kar) and being further in keeping with Special Bench decision of Tribunal reported in ITO vs. Lachmandas Raghunath Das Parihar (1984) 20 TTJ (Jp) 52 (SB): (1983) 6 ITD 474 (SB) deserves to be upheld. It is next contended by him that even if another view was possible, then interpretation which favours assessee should be adopted and for that reliance has been placed on decision of Hon'ble Supreme Court of India in case of CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177: (1973) 88 ITR 192 (SC). Mr. Manjani has further submitted that fact that Expln. 2 of s. 139(8) had been removed from Statute Book by Taxation Laws (Amendment) Act, 1984 also clearly indicates that intention of legislature was that hardship caused by erstwhile Expln. 2 should be avoided. In support of his contention that assessee registered firm should not have been charged interest under s. 139 (8) by treating it as unregistered firm, reliance has also been placed by learned authorised counsel on decision of Delhi Tribunal reported in 22 TAXMAN at page 79. On merits, Mr. Manjani has submitted that there were reasonable causes for delay in furnishing of return and that therefore when no notice under s. 271(1)(a) had been issued to assessee interest under s. 139(8) ought not to have been charged at all. After considering rival submissions we have not been able to persuade ourselves to accept representation made on side of assessee that interest should not have been charged on assessee registered firm by invoking provisions of Expln. 2 of s. 139 (8). provisions of s. 139(8)(a) of IT Act, 1961 provided that where return of income is not furnished within time-limit prescribed under sub-s. (1) of s. 139 or within time permitted in notice under sub-s. (2) of s. 139, assessee shall be liable to pay interest whether or not ITO had extended date of furnishing of return. It is further provided in Expln. 2 of s. 139(8) that for purposes of this sub-section, where assessee is registered firm, tax payable on total income shall be amount of tax which would have been payable if firm had been assessed as unregistered firm. In other words cumulative effect of provisions of s. 139(8)(a) and Expln. 2 thereof is that where return of income is belatedly filed by registered firm levy of interest under s. 139(8) will be on basis that it is unregistered firm. In view of clear provisions of s. 139(8)(a) and Expln. 2 thereto which do not permit any ambiguity about them, we would not be able to agree with representation made on side of assessee. In their decision in case of Jain Brothers and Ors. vs. Union of India and Ors. (1970) 77 ITR 107 (SC) their Lordship of Supreme Court had observed that it was open to framers of law to say that once registered firm committed default attracting penalty, it should be deemed or considered to be unregistered firm for purposes of imposition of penalty. Their Lordships further held that there was nothing to prevent legislature from giving benefit of reduced rate to registered firm for purposes of tax but withholding same beneficial treatment when it committed default and become liable to imposition of penalty. Having regard to above law laid down by Hon'ble Supreme Court which would apply in case of charging penalty interest under s. 139(8) also and having regard to language of provisions of s. 139(8) and Expln. 2 thereto, we would not be able to accept representation made by ld. authorised counsel of assessee. We may further point out that preponderance of judicial opinion is in support of validity of levy of interest under s. 139(8) on registered firm by treating it as unregistered firm and we are aware of several cases which are reported in Mahendra Kumar Ishwarlal vs. Union of India (1973) 91 ITR 101 (Mad), Ganesh Dass Sree Ram vs. ITO (1974) 93 ITR 19 (Gau), Mahendra Kumar Ishwarlal vs. Union of India (1974) 94 ITR 65 (Mad), Chhota Lal and Co. vs. ITO (1976) 105 ITR 230 (Guj), Jiwan Mal Hospital vs. ITO (1979) 11 CTR (MP) 184: (1979) 119 ITR 439 (MP), Hindustan Steel Forgings vs. CIT (1980) 14 CTR (P&H) 389: (1980) 121 ITR 793 (P&H): 19 TAXMAN 388, Chemmeens vs. ITO & Anr. (1984) 42 CTR (Ker) 89: (1984) 149 ITR 233 (Ker) and Geo Food vs. ITO (1985) 45 CTR (Ker) 142: (1984) 150 ITR 726 (Ker) and which support view which we have taken. decision of Special Bench of Tribunal reported in (1983) 6 ITD 474 (Jp) (supra) and decision of Hon'ble Karnataka High Court reported in (1981) 129 ITR 516 (Kar) (supra) and similarly decision of Delhi Bench of Tribunal reported in 20 TAXMAN 79 are not being followed by us in view of what Hon'ble Supreme Court has observed in (1970) 77 ITR 107 (SC) (supra) and in view of preponderant judicial opinion expressed by various High Courts in their decisions mentioned above. According to us, language of provision of s. 139(8) and Expln. 2 thereto is not ambiguous at all and, therefore, not capable to two reasonable interpretations ratio of decision of Hon'ble Supreme Court in case of Vegetable Product Ltd. (supra) would, therefore, not apply. We would, therefore, hold that AAC was not justified in giving direction which was violative of provision of s. 139(8) and Expln. 2 thereof as were applicable in asst. yr. 1978-79. On merits, however, Shri Manjani has been prima facie able to show that there were certain reasons which prevented assessee from filing return of its income within time. We understand that application for waiver of interest has been moved by assessee under r. 117A and is pending disposal at hands of ITO. We would suggest that ITO takes into account various reasons which obviously prevented assessee from filing its returns in time before deciding assessee's application filed under r. 117A. With above observations only ground in departmental appeal is allowed and ground No. 1 in cross objection filed by assessee is rejected. It is contended in second ground raised in cross objection filed by assessee that car expenses and depreciation thereon had been excessively disallowed to extent of 25 per cent by AAC. From chart furnished by ld. counsel of assessee, we find that in asst. yrs. 1975- 76, 1976-77 and 1977-78 disallowances had been made out of car expenses and depreciation on car to extent of 33 per cent Since in asst. yr. 1978- 79 certain special circumstances created on account of differences amongst partners prevailed, AAC was justified in decreasing disallowance to 25 per cent as against 33 per cent made by ITO. According to us, in absence of log book there is no further scope for reducing disallowance as was fixed by AAC. Subject to what has been stated in paragraph above, appeal filed by Revenue is allowed while cross objection filed by assessee stands rejected. *** INCOME TAX OFFICER v. MICRO PRECISION PRODUCTS