TaxTMI 
TaxTMI 
2012 (10) TMI 241
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....as revenue expenses. He was of the opinion that the taxes paid on new asset are capital in nature and he disallowed the same. 4. Being aggrieved, the assessee carried the matter in appeal before ld. CIT (A) but without success and now the assessee is in further appeal before us. 5. It was submitted by ld. A.R. of the assessee before us that the reliance is being placed on the submissions submitted before ld. CIT (A), which is available on page no.3 of the paper book. 6. Ld. D.R. of the Revenue has supported the order of ld. CIT (A). 7. We have considered the rival submissions and perused the materials on record and gone through the orders of authorities below. We find that it was submitted by the assessee before ld. CIT (A) as per page nos. 3 and 4 of paper book that it is not necessary to pay the R.T.O. Tax to put the cars into use and it cannot be paid within the time prescribed in the respective law but the cars can be used before paying the same. It was also submitted that it has no enduring benefit and the value of the vehicle is not appreciated by paying the R.T.O. Tax. Reliance was also placed on the judgment of Hon'ble Allahabad High Court rendered in the case o....
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....the vouchers, the nature of the expenses claimed could not be satisfactorily explained nor are they amenable to full verification. He made disallowance of lump sum of Rs. 2,50,000/- on this basis that expenses are not verifiable in nature. 12. Being aggrieved, the assessee carried the matter in appeal before ld. CIT (A). It was submitted by ld. A.R. of the assessee that all these expenses are duly supported by vouchers and have also been audited by the independent Auditor. It was also submitted that it includes various expenses such as travel, conveyance, lunch & dinner, typing and Xerox and other miscellaneious expenses incurred by the employees or other concerned persons in relation to sales tax matters, Excise matters, legal matters and other works of the company. Expenses were explained and details of expenses were filed. 13. Learned CIT (A) has noted that nature of these expenses continued to be vague and by their very description, some expenditures are inadmissible expenditure/personal expenses and this cannot be ruled out. He held that 25% of the total expenditure incurred by the assessee under this circumstance should be disallowed. In this manner, he restricted the d....
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.... cheque. He held that this payment is not connected with business and disallowed the same. 21. Being aggrieved, the assessee carried the matter in appeal before ld. CIT (A) but without success and now the assessee is in further appeal before us. 22. It was submitted by ld. A.R. of the assessee before us that this payment is for sale commission and drawn the attention to the submissions before ld. CIT (A) which is available on page no.8 of paper book. He placed reliance on the same submission before us. 23. Learned D.R. of the Revenue has supported the order of ld. CIT (A). 24. We have considered the rival submissions and perused the materials on record. We find that in the written submission filed before ld. CIT (A), it was submitted that the assessee company has made sales of Rs. 11,13,995/- to M/s Ajri Engineering Private Limited and therefore, 5% discount on the sale was allowed and the payment in question by way of gift cheque is in respect of discount and the same was paid in the name of Mr. Vivek B. Ajri of M/s Ajri Engineering Private Limited. 25. It is also submitted that T.D.S. has also been deducted and therefore the payment is purely for the business of as....
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....nt was made after deducting TDS and by way of demand draft. He also further submitted that this payment is for business purpose and therefore should be allowed. 32. Ld. D.R. of the Revenue supported the orders of authorities below. 33. We have considered the rival submissions and perused the materials on record. We find that in the bill available on page no. 101 of the paper book, there is no mention as to for which Sugar Plant in North Bihar, the servicing was carried out by Mr. Firoz Alam and when the same was carried out and how the assessee has to bear such expenses of servicing in Sugar Plants of North Bihar. As to whether, the same were within warranty period or whether any charges were realized by assessee from such Sugar Plants. 34. Under these facts, we do not find any reason to interfere in the order of ld. CIT (A). Thus, this ground is rejected. 35. Ground no.5 is as under: "Website expenses: (Para 11, Page 9 of CIT(A)-IV order) The Commissioner of Income Tax (Appeal)-IV erred in confirming disallowance of Rs. 5,57,650/- incurred for developing and maintaining company's website. The Appellant respectfully submit that this expenditure has rightly b....
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....ional changes paid for business purposes. The Appellant respectfully submit that an amount of Rs. 13,16,836/-was paid for development of own business in export, market and accordingly should be allowed as business expenditure." 41. Brief facts are that ld. A.O. has made disallowance of Rs. 38,31,437/- incurred by the assessee in respect of Sales Promotion/export expenses. When the assesse carried the matter in appeal before ld. CIT (A), he confirmed the disallowance of Rs. 13,16,836/-, which was paid to Mr. Terry Hall of Australia as retainership fees and deleted the balance disallowance Rs. 25,14,601/-. Now, the assessee in further appeal before us for the disallowance confirmed by ld. CIT (A). 42. It was submitted by ld. A.R. of the assessee before us that the company has appointed Mr. Terry Hall as a Consultant to survey and study of the Australian market for company's products. He further submitted that his appointment letter is available on page no. 107 and 108 of the paper book. He submitted that ld. CIT (A) was not justified in confirming disallowance on this basis that this expenditure was incurred by the assessee for setting up a subsidiary company in Australia an....
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.... to a concern without charging interest. In that case, it was held by Hon'ble the Apex Court that if it cannot be established that such advancing of interest free advances was for business purpose, interest expenditure is allowable. But, in the present case, facts are different. The issue here is that whether expenditure incurred in connection with setting up of a subsidiary company is allowable or not. Therefore, this judgment is also of no help in the present case. The expenditure incurred on setting up of a company is to be debited in the said company as preliminary expenses and the deduction for the same is allowable in the hands of that company under Section 35D to the extent of 1/5th of such expenditure for each of the five successive previous years. 46. Therefore, we do not find any reason to interfere in the order of ld. CIT (A) on this issue. This ground is rejected. 47. Ground no.7 is as under: "Entertainment expenses: (Refer Para 14, Page 14 of CIT(A)-IV order) The learned Commissioner of Income Tax (Appeal)-IV erred in disallowance of Rs. 150000/- (1/3rd) out of Rs. 4,52,233/- incurred towards entertainment expenses. The Appellant respectfully submit t....
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....e paper book. The same includes expenditure of Rs. 25,000/- for purchase of Thomson Colour Television and also Rs. 23,397/- for purchase of jewelry. There are various expenditure for purchase of silver utensils and other silver articles and there is no mention in the details as to for which guest, these expensive gifts were given and whether the same is for business purpose or not. Ld. CIT (A) has confirmed the disallowance of Rs. 92,904/- out of total disallowance made by ld. A.O. of Rs. 1.20 lacs although, the total expenditure incurred was of Rs. 2,84,902/-. 56. We have considered the facts of present case as discussed above and we do not find any reason to interfere in the order of ld. CIT (A) on this issue because some element of personal expenditure cannot be ruled out in such type of gifts of expensive items such as Television, gold jewellery and silver articles. We, therefore, decline to interfere in the order of ld. CIT (A). This ground is rejected. 57. Ground No.9 is as under: "General repairs expenses: (Refer Para 15, Page 15 of CIT (A)-IV order) The learned Commissioner of Income Tax (A)-IV erred in confirming addition of Rs. 57,646/- incurred towards gen....
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....ons made by the appellant. The Appellant respectfully submits that the appellant has rightly claimed an amount of Rs. 5,34,579/- and there has not been any excessive claim on account of job work charges." 58. Learned A.R. of the assessee reiterated the same arguments which were made before ld. CIT (A) and which are available on page no.16 of the paper book. He also submitted that the submissions and details are available on pages 162 to 199 of the paper book and the matter may be restored back to the file to the ld. A.O. for a fresh decision. 59. Learned D.R. of the Revenue supported the orders of authorities below. 60. We have considered the rival submissions and perused the materials on record and gone through the order of authorities below. We find that it was submitted by the assessee before ld. CIT (A) that in earlier year, the expenses were accounted for by way of credit to provision of expenses and in the present year, bills are accounted for by way of credit to the account of M/s VVN Mfg. & Investa Ltd. but the provision has been reversed. If this is so, then the debit in the expenditure account will be to the extent of expenses of present year only which could ....