TMI Blog2011 (1) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... members - These expenses were for the welfare of employees and, therefore, the expenses were deductible as such - Therefore, it is held that the impugned expenditure was deductible in computing the income. Personal use of the car and telephone expenses: The CIT (A) deleted both the additions - The Tribunal upheld the view of the CIT(A) by holding that the said expenditure was relatable to be taken as business expenditure in view of the decision of Gujarat High Court reported in Sauyaji Iron & Engineering Company v. Commissioner of Income Tax. Foreign travelling expenses - The CIT(A) deleted the addition - The Tribunal while upholding the view of the CIT (A) observed that the continuous training was essential for the functioning of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.5,54,868/- made by the Assessing Officer on account of staff welfare expenses disregarding the fact that the expenditure was not incurred wholly and exclusively for the business purposes? III. Whether on the facts and in the circumstances of the case, the Ld. ITAT was right in law in conforming the order of the Ld. CIT(A) in deleting the addition of Rs.1,46,024/- and Rs.34,824/- made by the Assessing Officer on account of personal use of car and telephone expenses respectively even though the assessee had failed to establish that these expenses were incurred wholly and exclusively for the business purposes and the possibility of personal use cannot be ruled out and in contravention of the decision of Hon'ble Madras High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding; (ii) expenses incurred on account of staff welfare; (iii) expenditure on account of personal use of car and telephone; and (iv) expenses on account of foreign travelling which were incurred by the employees of the assessee. 6. Learned counsel for the revenue submitted that the said expenses were not allowable under Sections 38(2) and 40A of the Act as the same are excessive and unreasonable. The Assessing Officer had rightly disallowed the said expenses. However, the CIT(A) and the Tribunal without appreciating the material on record had allowed the expenses as noticed aforesaid. Learned counsel relied upon the judgments in Commissioner of Income Tax Vs. Chitram and Co. (P) Ltd. [1991] 191 ITR 96 and Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee also purchased 264 pairs of shoes for its staff members. These expenses were for the welfare of employees and, therefore, the expenses were deductible as such. The learned DR was not able to distinguish the facts of this year vis-a-vis the facts of that year. Therefore, relying on the order of the Tribunal, it is held that the impugned expenditure was deductible in computing the income. Thus, this ground is also dismissed. Addition of Rs.1,46,024/- on account of personal use of the car and Rs.34,824/- on account of telephone expenses: Under this head, the Assessing Officer made the additions of Rs.1,46,024/- and Rs.34,824/- on account of personal use of car and telephone on the ground that the same were not incurred wholly and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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