Appeal dismissed on personal expenses, sent back for deduction computation under section 80-HHC.

The appeal challenging the disallowance of 1/10th of telephone and vehicle expenses for personal use was dismissed, with the Tribunal finding the disallowance justified due to lack of evidence proving all expenses were solely for business purposes. Regarding the claim for deduction under section 80-HHC, the matter was sent back to the Assessing Officer for computation based on a Special Bench decision not available during earlier proceedings. The Tribunal directed the computation of the deduction in line with the Special Bench decision, partially allowing the revenue's appeal for statistical purposes.

---

---

Issues involved: Disallowance of expenses for personal use and claim for deduction u/s 80-HHC of the Act.

Disallowed expenses for personal use:
The appellant, a firm, challenged the disallowance of 1/8th of telephone and vehicle expenses for A.Y. 2004-05, which was reduced to 1/10th by the CIT(A). The department's reasoning for disallowance was the absence of log books and call registers as evidence. The Tribunal found the 1/10th disallowance reasonable due to lack of records to prove all expenses were solely for business purposes. The appeal was dismissed as the disallowance was deemed justified.

Claim for deduction u/s 80-HHC:
The dispute centered on the assessee's claim for deduction u/s 80-HHC in relation to transfer of DEPBS credits. The appellant's turnover exceeded 10 crores, and the counsel agreed to the matter being sent back to the AO for computation based on a Special Bench decision not available during the earlier proceedings. The Tribunal, upon review, directed the matter to be restored to the AO for computation of the deduction in line with the Special Bench decision. The revenue's appeal was partly allowed for statistical purposes.

Separate Judgement:
No separate judgement was delivered by the judges in this case.

---