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2012 (10) TMI 241 - AT - Income TaxDisallowance of Expenses – Capital vs. Revenue Expense - Held that:- RTO Tax expenses payable on vehicles are to be allowed as they do not create capital asset. car is already in existence and the road tax is required to be paid for running the car - can be claimed as Revenue Expense - in favour of assessee. Other Legal Incidental Expenses:- Disallowance is restricted to the extent of 10% of total expenses instead o 25% to meet the ends of justice - Partly allowed in favour of assessee. Commission by way of Gift Cheque -Not a real business transaction - Disallowed - against the assessee. Professional service charges - Payment done by assessee for repairs in other plant of assessee - Disallowed in absence of Evidences to prove the charges are in connection with business - against the assessee. Web site exp- Expenses incurred for developing and maintaining the website which is required to be continuously updated - Recurring expenditure - Allowed in favour of assessee. Sales promotion/export expenses - incurred for development of own business in export market and accordingly should be allowed as business expenditure - in favour of assessee. Entertainment Expenses - Allowed to the extent used in relation to entertainment of company’s clients or customers - Partly allowed in favour of assessee Gift Presentation Articles - Gifts of expensive items such as Television, gold jewellery and silver articles of Personal nature not a business exp. - Disallowed - against the assessee. General Repair Expenses - As Expenses belong to annual maintenance Contract and are common in nature and hence rightly claimed as revenue expenditure – in favour of assessee. Inflate Job-work Expenses - necessary order as per law as per above discussion after providing adequate opportunity of being heard to the assessee. This ground is allowed for statistical purpose.
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