1984 (2) TMI 159

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....5th of the depreciation on the motor car at Sailchar Branch. He further disallowed the sum of Rs. 47,568 spent as training expenses to Shri R.K. Goenka, one of the partners of the assessee firm. He made some other addition also with which we are not concerned in this appeal. The assessee took an appeal to the AAC, who, however, did not accept the contention of the assessee in respect of the above mentioned disallowances and confirmed the same. Being aggrieved by the said order, the assessee preferred this appeal. Apart from the disallowances stated above, he took objections to disallowance of Rs. 1,000 out of travelling expenses and Rs. 500 out of misc. expenses. The appeal is opposed by the department. 3. In the paper book filed by the ....

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....d a sum of Rs. 500 out of vehicle maintenance expenses at Silchar Branch. His reason is as follows; "It is stated that partners do not stay at Silchar excepting occasional visit by one partner. Hence, disallowed on estimate Rs. 500." The AAC confirmed this disallowance because reason and purpose for which the pertol was purchased was not narrated anywhere in the statement submitted before him. 6. In our opinion, the reason given by the ITO or the AAC is not sufficient for this disallowance. It is not the case of the ITO that the partmers used the motor car at Silchar because he does not dispute the fact that the partners do not stay at Silchar. For this reason the disallowance of Rs. 322 being 1/5th of the depreciation of the motor....

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.... come to the disallowance of Rs. 47,568 as training expenses of Shri R.K.Goenka, one of the partners of the firm. The assessee firm is a dealer of M/s Tractors & Farm Equipment Ltd. Madras, for the Massey Ferguson products of farm machineries. Shri R.K.Goenka, was nominated by M/s Tractors & Farm Equipment Ltd. Madras, for training at Stoneleigh, UK, for 12 weeks. The ITO was of the opinion that the expenses was capital expenditure and, as such, disallowance this amount. The AAC agreed with him in holding that the expenditure incurred by the assessee firm was of capital nature and upheld the action of the ITO. 10. It was contended by the authorised representative for the assessee that the expenditure on training of partner with a view to....