TaxTMI 
TaxTMI 
2020 (6) TMI 44
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....als were heard together and are now being disposed-off by way of this common order for the sake of convenience and brevity. 1.2 The Ld. Authorized Representative, placed on record a chart in support of issues raised in the appeal. We have carefully heard the arguments advanced by both the representatives and perused relevant material on record. In the above background, the appeal for AY 2010-11 is taken up first. ITA No. 4213/Mum/2017, AY 2010-11 2.1 This appeal contests the order of Ld. Commissioner of Income Tax (Appeals)-24, Mumbai [CIT(A)], Appeal No. CIT(A)-22/DCIT-10(3)/IT- 266/13-14 ,dated 27/03/2017 on following grounds: - 1. Disallowance of the Prepaid Expenses: The learned CIT (A) erred in upholding the ....
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....sessee is aggrieved by disallowance of certain expenditure. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 2.2 The assessee being resident corporate assessee stated to be engaged in the business of sale, servicing, erection & commissioning of construction equipment was assessed u/s. 143(3) on 20/12/2013 wherein the income of the assessee was determined at Rs. 1426.91 Lacs after certain additions / disallowances as against returned income of Rs. 1295.51 Lacs e-filed by assessee on 27/09/2010. 2.3 Disallowance of Prepaid Expenses: Upon perusal of financial statements, it transpired that the assessee reflected an amount of Rs. 5.12 Lacs as Prepaid Expenses in the Balance Sheet. The assesse....
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.... and repair contract for the mining machines which the Liebherr group may have sold to its customers in India. Accordingly, the technical and product specialists of the Liebherr group provided training to the assessee's employees on resolving the complications in the imported machines. Keeping in view the nature of expenses, we find that the action of Ld. AO in treating the said expenditure as capital expenditure was bereft of any merits. The expenditure was merely training expenditure to train the assessee's employeesqua new products. The assessee did not gained any benefit of enduring in nature. The said expenditure was rightly claimed as revenue expenditure. Ground No.2 stands allowed. 2.5 Depreciation: On verification of fixed ....
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.... going by the said argument, whatever expenditure was claimed by a corporate assessee, could never be disallowed despite non-fulfilment of conditions laid down by Sec. 37(1). Not convinced with the arguments, this addition stand confirmed. The ground stands dismissed. 2.7 Capital Expenditure: Certain items under the head repair and maintenance expenditure claimed as revenue expenditure, were treated as capital expenditure and depreciation was allowed against the same. The details of the same has been tabulated in para-9 of the quantum assessment order. The expenditure was in the nature of networking & cable work in server room, electrical work for server room, networking cabling, furniture works and cost of blinds etc. The adjustment ....
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....nst Sales Promotion Expenses for want of supporting evidences / documents. The learned first appellate authority reduced the travelling expenditure disallowance to 30% but confirmed the disallowance of sales promotion expenses. Aggrieved, the assessee is under further appeal before us. Going by the adjudication in AY 2010-11, the travelling expense disallowance stand restricted to 10%. The nature of sales promotion expenses would show that these are in the nature of gifts, advertisement expenses, entertainment expenses, exhibition expenses, sales commission expense and sales promotion expenses. The substantial expenses are exhibition expenses, sales commission and sales promotion expenses. Keeping in view the nature of expenditure, we op....