TaxTMI 
TaxTMI 
2016 (11) TMI 890
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....year 2004-2005, the assessee had returned loss of Rs. 10,12,980/-. The Assessing Officer, after making additions and disallowances, determined the total income at Rs. 50,49,560/-. The appeal filed by the assessee was allowed by the Commissioner of Income Tax (Appeals). The Revenue challenged the order of the 1st Appellate Authority before the Tribunal. The Tribunal passed the impugned order partly allowing the appeal of the Revenue. It is in these circumstances, the assessee has filed this appeal, framing the following questions of law for the consideration of this court: i) In the facts and circumstances of the case, ought not the Tribunal had allowed the expenditure claimed on the use of cars and telephone bills ad allowable expenditur....
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....lio. In respect of these cars, he had incurred a total expenditure of Rs. 22,15,189/-. The Assessing Officer disallowed 50% thereof and allowed only 50% as expended for business purposes. The disallowance was reduced to 5% by the 1st Appellate Authority and the Tribunal set aside the order of the 1st Appellate Authority and restored the order passed by the Assessing Officer. 6. Reading of the order passed by the Tribunal shows that it has endorsed the conclusion of the Assessing Officer that the 8 cars were maintained by the assessee as his personal fad. It was also found that the assessee has not maintained any log register or other materials to establish that all these 8 cars were used by the assessee exclusively for the purpose of car....
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.... of the 1st Appellate Authority and restored the order of the Assessing Officer. 9. The learned counsel appearing for the appellant challenged the finding of the Tribunal by relying on the provisions of Section 64(1) (ii) and the decision of the Andhra Pradesh High Court in Batta Kalyani v. Commissioner of Income Tax [154 ITR 59]. 10. Section 64(1)(ii) provide that in computing the total income of any individual, there shall be included all such income as arises directly or indirectly to the spouse of such individual by way of salary, commission, fees or any other form of remuneration whether in cash or in kind from a concern in which such individual has a substantial interest. This provision is followed by a proviso which states that....
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.... has to be answered against the assessee and in favour of the revenue. 13. Insofar as the third question regarding the expenditure incurred for the Research and Development is concerned, reading of paragraph 7 of the assessment order shows the same was disallowed by the Assessing Officer on the finding that even according to the Authorized Representative of the assessee, the expenditure in question was incurred during the previous assessment year and that the assessee who is following the mercantile system of accounting could not have claimed it during the assessment year in question. It was this finding which was ultimately sustained by the Tribunal. Since the assessee is admittedly following the mercantile system of accounting, the exp....