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2012 (6) TMI 706 - AT - Income TaxCapital or revenue expenditure - network development expenses - new line of business but the expenses were incurred to extend the business by opening new branches – Held that:- assessee has already set up its business in the preceding assessment year. Therefore, the expenditure incurred by the assessee for its various branches which are revenue in nature has to be allowed as deduction during the year. Disallowance of conveyance charges, telephone expenses, miscellaneous expenses, printing & stationery, repairs & maintenance and depreciation of vehicles – Held that:- AO has not confronted the assessee about the discrepancies, if any. He merely disallowed various expenses on adhoc basis on the ground that personal element in those expenses cannot be ruled out - there cannot be an element of personal use in a corporate entity and no disallowance has been made in the scrutiny assessment - Since the A.O. has not brought on record specific evidence of any expenditure which is personal in nature or which is not for the purpose of business - no adhoc disallowance can be made under the facts and circumstances of the case - ground raised by the Revenue is dismissed Addition made by the Assessing Officer on account of courier charges - no response by the party to the notice issued by the Assessing Officer u/s.133(6) and summons issued u/s.131 of the I.T. Act - assessee neither produced the said person nor made any efforts to substantiate its claim – Held that:- Payments have been made by A/c payee cheques and all the details were furnished before the A.O - assessee has discharged the onus cast upon it. Merely because the other party did not attend the office of the A.O. in response to the summon u/s 131, the assessee, in our opinion, cannot be blamed for it. The party has also not denied the transactions. The A.O. has enough power to enforce the attendance of the other party which he failed to do in the instant case - no addition was called for by the A.O. and the order of the ld. CIT(A) deleting the addition is justified - appeal filed by the Revenue is dismissed.
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