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2009 (2) TMI 819 - AT - Income TaxDisallowance on claim of travelling expenses - assessee is in the business of liaison work - HELD THAT:- assessee has visited the various foreign countries and as a consequence of this travel as per the statement of the assessee itself in the notes filed, the assessee has purchased machinery and has also imported garments. it is noticed that as a consequence of the travel the assessee has done trading business as also invested in capital asset being plant and machinery. This being so, we are of the view that the expenses incurred by the assessee on his travel to Hong Kong and Germany being two places from where he has imported the machinery, should be treated as capital expenditure and in regard to the other travels, which have resulted in purchase of garments, the same should be treated as revenue expenditure. Hence, the finding of CIT(A) on the issue is reversed and AO is directed to allow the assessee the portion of foreign travel expenses in relation to the places from where the assessee has purchased the garments as revenue expenditure and the expenditure in relation to the purchase of machinery i.e., from Germany and Hong Kong as capital expenditure. Therefore, the assessee's appeal are partly allowed. Disallowance of l/10th out of car expenses - HELD THAT:- It is noticed that CIT(A) has been quite reasonable in restricting the disallowance to 1/10th of the expenditure as against 1/8th disallowed by AO. This being so, as no error in the order of CIT(A) has been specifically pointed out and the assessee has not been able to specifically show that all the expenses in regard to the car expenses were business expenses, the finding of CIT(A) on this issue stands confirmed. Therefore, the assessee's appeal stands dismissed. Levy of interest u/s. 234B - treating the seized cash as advance tax - HELD THAT:- It is noticed that this issue has been considered in the case of K.K. Marketing [2005 (5) TMI 58 - DELHI HIGH COURT] held that on request for adjusting the seized cash against advance tax due, it should be done and no interest u/s. 234B can be charged. We also face with the decision of the Hon'ble Madhya Pradesh High Court in the case of Ramjilal Jagannath & Ors.[1999 (4) TMI 45 - MADHYA PRADESH HIGH COURT], held that such request of the assessee for adjustment of the seized cash cannot be made against advance tax but considering the fact that the decision in the case of K.K. Marketing (supra) is by the Hon'ble jurisdictional High Court, it is held that the assessing authority was wrong in not adjusting the seized cash against the advance tax as requested for by the assessee. Therefore, respectfully following the decision of Hon'ble jurisdictional High Court in the case of K.K. Marketing, AO is directed to adjust the seized cash as requested by the assessee against advance tax from the date on which the assessee made the request for the adjustment and recompute the levy of interest u/s. 234B accordingly. Hence, appeal is held in favour of the assessee.
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