1993 (6) TMI 36

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....,000 incurred by the assessee as installation charges for computer machinery was revenue expenditure and as such an allowable deduction ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that an amount of Rs. 8,287 being the amount paid by the assessee to some of its employees was only disallowable under section 40A(5) of the Act out of the total amount of Rs. 14,603 ?" The relevant assessment year is 1970-71. The assessee is a limited company carrying on business of manufacturing pharmaceuticals, medicines, etc. During the year relevant to the assessment year, the assessee entered into an agreement with International Computers (India) Private Limited for install....

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....Ltd. [1976] 105 ITR 680, the Appellate Assistant Commissioner held that the amounts paid by way of bonus cannot be treated as perquisites and further held that only a sum of Rs. 8,287 was liable to be disallowed. As the Revenue was not satisfied with the order passed by the Appellate Assistant Commissioner as regards the installation charges, and as both the parties were not satisfied with the decision of the Appellate Assistant Commissioner with respect to the payment by way of bonus, they preferred appeals to the Tribunal. The Tribunal held that, as the computers were only hired by the assessee and as the supplier had a right to take them back after giving a short notice, it cannot be said that the assessee had acquired a benefit or ad....

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....hire charges. So far as the computers are concerned, it is an admitted position that the computers belong to the International Computers (India) P. Ltd. and that they did not become the property of the assessee. It is also not in dispute that it was open to the supplier of the computers to remove them on giving short notice to the assessee. It is, therefore, difficult to appreciate how the assessee can be said to have acquired a benefit or advantage or facility of enduring nature by incurring that expenditure. In fact, the said computers were removed by the supplier within two or three years from the date of installation of these computers. There is no material to show that the assessee in fact wanted to install them on a permanent basis ei....