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2010 (2) TMI 912 - AT - Income TaxExpenses on exhibition/conference - 50% disallowed - Held that:- The only reason assigned by the AO for disallowing the claim of the assessee is that it had not made any export sales either in the past or in the current year cannot be a valid reason for making the disallowance. AO has not doubted the genuineness of expenses and the business expediency for incurring such expenses. The turnover of the assessee had increased many folds because of these conferences and advertisements from assessment years 2002-03 to 2005-06. The disallowance can be made if it was found that expenses were not wholly and exclusively for the purpose of business. But no such circumstances have been pointed out by the AO. In favour of assessee. Depreciation - CIT (Appeals)allowing depreciation at the rate of 25 per cent on video conferencing equipment as against 60 per cent claimed by the assessee on the ground that video conferencing equipments are not computers - Held that:- Video conference system is a computer device, that accept information in the form of digital data by way of video input i.e. with the help of web-cam or video camera and audio input with the help of microphone. The system thereafter processed the data and transfer through analogue or digital telephone network or lan and digital gives the output data by way of audio video output. It is a technical device whose function are similar to the computer because basically computer also respond to a specific set of instructions in a well defined manner – On the basis of Samiran Majumdar (2005 (8) TMI 293 - ITAT CALCUTTA-B) wherein printer and scanner was considered integral part of the computer and allowed depreciation at the rate of 60 per cent. Thus issue set aside to the file of the AO for readjudication as the note exhibiting the functioning of a video conferencing equipment place before us was not placed before the AO - in favour of assessee for statistical purposes.
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