TMI Blog2013 (11) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... director of the assessee company and his wife but, used exclusively for the assessee’s business – Decided in favour of assessee. Disallowance of expenses on foreign travelling – Held that:- The onus to prove that expenses are incurred for business purposes is on assessee – The company has not made any exports/ imports to/ from the country visited – The assessee has not produced any evidence regarding any meeting or letter of intent for import of appellant’s goods / material from any party in London or UK – Not furnished the name and other details of any party whom the persons met for the purpose of any business in London - Decided against assessee. Busineses promotion and telephone expenses – Held that:- In view of deficiencies of bill and vouchers of the expenses, the disallowance was restricted to 10% in case of business promotion expenses and 5% in respect of telephone expenses as against disallowance of 25% an 10% respectively made by the assessing officer – Decided against assessee. - ITA No.4155/M/2008 - - - Dated:- 19-10-2012 - H L Karwa And D Karunakara Rao, JJ. For the Appellant : Shri Dharmesh Shah For the Respondent : Shri Rakesh Ranjan, DR ORDER:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of proceedings before us, Shri Dharmesh Shah, Ld Counsel for the assessee mentioned that the assessee made request for admission of the additional grounds vide letter dated 17.8.2011 and now he proposed to withdraw the same. Considering the consent of both the parties and the preliminary request of the assessee for admission of additional evidence stands dismissed as withdrawn. 4. Briefly stated the relevant facts of the case are that the assessee filed return of income for the assessment year 2003-04 declaring income of Rs. NIL after claiming the deduction u/s 80-HHC. The same was scrutinized u/s 143(3) of the Act and the total assessed income was determined at Rs. 45,63,885/-. AO made certain additions and also AO did not allow deduction u/s 80HHC on account of export incentives in view of negative export profits. Aggrieved with the same, assessee filed an appeal before the CIT (A) and succeeded in getting a part relief. Aggrieved with the additions confirmed by the Ld CIT (A), assessee filed present appeal before us with 7 grounds and the ground wise adjudication is given in the following paragraphs. 5. Ground no.1 relates to allowability of deduction u/s 80-HHC in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO disallowed a sum of Rs. 1 lakh on adhoc basis out of total claim of Rs. 4,89,269/-. For the said disallowances, the AO gave the common reason that the cars in question were held either by the Director or by the executive employee (Snehalata R Kokhani) of the Company. During the first appellate proceedings, assessee relied on the Allahabad High Court judgment in the case of Navdurga Transport Co. 149 CTR (All) 219 and the Hon ble Supreme Court judgment in the case of Mysore Minerals Ltd vs. CIT (1999) 239 ITR 775 (SC) for the proposition that the registered ownership is not necessary and acquiring the possession of the asset and full rights to use cars for the purpose of business and profession of the assessee shall make eligible for claiming depreciation u/s 32 of the Act. CIT (A) did not appreciate the stand of the assessee and held that the said judgments are distinguishable on facts. CIT (A) is of the opinion that the judgment in the case of Mysore Minerals Ltd (supra) was decided relating to the claim of depreciation on a building and the Allahabad High Court judgment in the case of Navdurga Transport Co (supra) was decided on the assessee firm and the vehicles were held in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H) and find that the same helps the assessee. The ratio of the judgment in the case of Metalman Auto P. Ltd. (supra) reads as under: S. 32: Depreciation - Assets in the name of managing director - Exclusive use by company Depreciation under section 32 was allowable to the assessee company on the assets which were purchased in the name of managing director of the assessee company and his wife but, used exclusively for the assessee s business (AY: 2004-2005). CIT vs. Metalman Auto P. Ltd. (2011) 199 Taxman 149 (Mag.) / 52 DTR 385 / 336 ITR 434 (P H) (High Court). 11. Therefore, we are of the considered opinion that the rejection of the claim of depreciation on cars is not appropriate. Further, in the absence of any specific finding by the AO that the vehicles were used by the Director or employee for their personal use, the disallowance on account of interest on motor car loan and motor car expenses is unwarranted. Accordingly, ground nos. 3,4 and 7 are allowed. 12. Ground no.5 relates to allowability of foreign travel expenditure of Smt. Snehalata R Kokhani (an executive employee), the spouse of Sri Ramesh Chandra Kokhani, the earlier Director of the company. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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