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2015 (1) TMI 914 - ITAT JAIPURDisaallowance of showroom expenses - CIT(A) deleted the addition - Held that:- The appellant had not reverted the finding given by the learned CIT(A) with respect to showroom expenses, therefore, we confirm the addition made by the learned CIT(A). He was reasonable to accept the assessee’s submission, therefore, revenue’s appeal is dismissed on this ground. - Against revenue. Disallowance of repair and maintenance expenses - Held that:- The assessee’s arguments has been found convincing. He also furnished copy of evidence at page Nos. 17 to 19 of paper book, which has also been submitted before the Assessing Officer, which shows that the assessee had purchased the cable from Frig Care Centre, 7, Aerodrame Circle, Kota vide bills No. 1133 dated 06/8/2007 and 1117 dated 04/8/2007, ₹ 80,840/- paid to JVVN Ltd. as per paper book page No. 20-21. However, expenditure incurred by the assessee under this head at ₹ 20,21,020/-. The Assessing Officer disallowed 10% out of total expenses at ₹ 2,02,102/-, which was restricted by the Assessing Officer at ₹ 1,25,000/-. The learned A.R. has not controverted the findings given by the learned CIT(A) as well as the Assessing Officer that the assessee was unable to produce the complete bills and vouchers related to repair and maintenance. Therefore, he was reasonable to restrict the disallowances at 5%. - Decided partly in favour of assessee. Disallowance of foreign traveling expenditure of directors, employees - the employees were directors’ wives, who travelled with the directors due to their personal relation - Held that:- Considering both the sides and case laws referred by the learned A.R., which are not squarely applicable on the case of assessee as the relative in all the case laws referred by the assessee were on foreign tour related to business purposes. However, in case of assessee, no evidence was produced before the lower authorities as well as before us that purpose of the directors as well as their wives and directors employees was for business. Therefore, we confirm the order of the learned CIT(A).- Decided against assessee. Ad hoc disallowance under the head Staff Welfare Expenses - Held that:- After considering the assessment order as well as finding given by the learned CIT(A) we hold that no specific defects had been pointed out by the lower authorities except holding that they were claimed on self made vouchers. The assessee had incurred these expenses on staff welfare, which are required to maintain the cordial relation with the staff, so that the company’s target can be achieved. We find that these expenses were incurred wholly and exclusively for the business purposes, therefore we delete the addition confirmed by the learned CIT(A) on this ground. - Decided in favour of assessee. Disallowance of depreciation on vehicles - the vehicles are not allowed to be used without insurance, which was done after the end of the year ignoring that the vehicles were registered by the RTO as on 31/3/2008 - Held that:- both the vehicles were registered on 31/3/2008 and vehicles were used for Demo purposes which can safely be placed at the business premises for the purpose of Demo. Even on Demo vehicles, the insurance is required but the assessee had placed these vehicles in its showroom for Demo purposes, which proved that the assets were used on last date for the purpose of business, accordingly, depreciation claimed by the assessee is justified. - Decided in favour of assessee. Disallowance of road tax for trucks by treating the same as prepaid expenditure - Held that:- The payment of road tax in advance is allowance U/s 43B even pertained to subsequent year.- Decided in favour of assessee.
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