2017 (5) TMI 676

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.... which reads as under : "Because the Commissioner of Income-tax (Appeals) has erred on facts and in law in upholding the disallowance of Rs. 1,00,000 out of sales promotion expenses and miscellaneous expenses, which expenses being incurred for the purposes of business, be deleted." 3. After hearing the rival submissions and going through the grounds as well as the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) and that of the Hon'ble Guwahati High Court in the case of Assam Company (India) Ltd. v. CIT [2002] 256 ITR 423 (Gauhati), I admit the additional ground. 4. Ground Nos. 1 and 2 of the appeal relate to the sustenance of disallowance of Rs. 2,10,000 out of training....

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....e copy of which was filed before me during the course of hearing and available at paper book pages 1 to 2. In the said decision, the question before the Hon'ble High Court was whether the expenditure incurred towards the cost of the software is a capital expenditure or revenue expenditure. The Hon'ble High Court took the view that the expenditure incurred on the software package is a revenue expenditure relying on the decision of the Hon'ble Madras High Court in the case of CIT v. Southern Roadways Ltd. [2008] 304 ITR 84 (Mad) in which the High Court held as under (page 90) : "For the assessment years 1995-96 to 1997-98 the assessee claimed the expenditure incurred on software packages as revenue expenditure, but the same was disallowed b....

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....red by the said decision of the Hon'ble Madras High Court. No contrary decision was brought to my knowledge. I, therefore, respectfully following the decision of the Hon'ble Madras High Court, delete the addition of Rs. 2,10,000. Thus, ground Nos. 1 and 2 stand allowed. 6. Ground Nos. 3, 4 and 5 relate to the disallowance of Rs. 31,595 out of the salary paid to Smt. Seema Gupta by applying the provisions of section 40A(2)(b) of the Act. 7. The facts related to this issue, in brief, are that the Assessing Officer noted that the assessee has paid salary to Smt. Seema Gupta amounting to Rs. 1,27,595 who is covered under section 40A(2)(b) of the Act. The Assessing Officer was not satisfied with the explanation of the assessee that she has bee....

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....10. Ground No. 7 relates to the sustenance of disallowance of Rs. 64,119 under the head depreciation on car, Rs. 40,735 under the head car running and maintenance and Rs. 2,01,495 under the head postage and telephone expenses. All these expenses come to Rs. 3,06,349. Since the personal use of car and these expenses has not been ruled out therefore, he disallowed one-sixth of these expenses, which was confirmed by the Commissioner of Income-tax (Appeals). 11. We have heard the rival submissions, carefully considered the same along with the orders of the tax authorities below. Looking to the nature of the business, I am of the view that the disallowance on account of personal expenses is on the higher side. The personal use of the car has no....