TaxTMI 
TaxTMI 
2022 (3) TMI 1672
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....issues "1. Disallowance of product replacement (product development) expenditure - Rs.85,18,012/- 2. Depreciation on product development expenses of earlier years, not granted 3. Addition of Rs.9,83,580/- on account of undisclosed TDS appearing in Form 26AS 4. Adhoc disallowance of housekeeping expenses of Rs.1,25,12,856/- 5. Adhoc disallowance of other expenses of Rs.43,29,593/-" The brief facts of the case 3. The assessee is a Pvt. Ltd., company engaged in the business of manufacturing and trading of oil seals, bearing seals, engine radial shaft seals, wheel seals etc and also into manufacture of large size bearings. The assessee filed its return of income on 30/11/2014 declaring a total ....
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....ciation at 25% on the expenditure so disallowed treating it as a capital asset. 5.1. Aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A) who sustained the disallowance. 5.2. Aggrieved by the order of the CIT(A), the assessee is in appeal before us. 5.3. The ld.AR submitted that this issue is covered by the decision of the coordinate bench of the Tribunal in assessee's own case in (IT(TP)A No. 330/Bang/2014 for the asst. year 2009-10 wherein this Tribunal held that the expenses are revenue in nature and deleted the disallowance made. 5.4. The ld. DR supported the decision of the lower authorities. 5.5. We heard the rival submissions and perused the materials on record. We notice that the coordinate....
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....e AO. The assessee has also not registered any patent or know how, as assumed by the AO. Further, the expenses were incurred on purchase of moulds etc., which are incurred in the normal course of business. Accordingly, he submitted that there is no reason to treat this expenditure as capital in nature. 26. We heard Ld D.R and perused the record. We find merit in the contentions of the Ld A.R. We notice that the AO has only assumed that these expenses would give rise to creation of any patent or know-how and accordingly took the view that these expenses are capital in nature, i.e., there is no material with the AO to show that these expenses have resulted in creation of any patent or know how as assumed by him. Hence, we are of the ....
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.... 317 to 321 of paper book has submitted a detailed reconcilement of income and tax credit as per the books of accounts and form No.26AS. The ld.AR submitted that the AO did not take into account the explanations offered by the assessee and came to the conclusion that the assessee was unable to explain the difference. The ld. DR supported the additions made by the lower authorities. 7.4. We have heard both the parties and perused the material on record. We noticed that the assessee vide above mentioned letter, had provided the details of reconciliation of income and tax credit as per books of accounts and Form 26AS. He also provided the reasons for the differences in the said reconciliation statement. The CIT(A) and the AO did not provide....
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....sly booked expenditures by way of inducements to various people in the form of compliments, gifts etc. under the head Housekeeping and other expenses. The CIT(A) went on to state that the assessee has more to hide than reveal and knowing that expenses incurred are not for the purposes of business, decided to give them respectability by hiding the same under the head 'Housekeeping and Other Expenses'. 8.2. The ld.AR submitted that during the course of asst., the assessee had indeed submitted the ledger extract of entire housekeeping and other expenses and based on AO's request the assessee also submitted sample invoices. The ld.AR submitted that the assessee was not given a proper opportunity of being heard before the lower authorities. T....