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2014 (5) TMI 111 - AT - Income TaxDisallowance of Various expenses - Motor Car Expenses, depreciation on Motor Car, Staff Welfare Expenses and Conveyance Expenses – Held that:- Revenue contended that the disallowances are warranted considering the cash payments, assessee's failure to discharge the onus, rejection of the self-serving vouchers, non-maintenance of the log book etc. - in principle, there is a need for disallowance - However, the unsupported flat rate of 20% adopted by the AO in all the four accounts for making disallowances cannot be appreciated - out of the total debits of Rs. 41,410/-, disallowance of Rs. 25,000/- on the four accounts should be allowed – Decided partly in favour of Assessee. Disallowance of Loss on Sale of Motor Car – Held that:- The Motor Car is a part of block of asset on which the assessee has already been claimed depreciation in the earlier years - the loss claimed by the assessee is related to a depreciable asset – it constitutes capital loss - the loss related to a depreciable asset does not constitute revenue expenditure and the disallowance made by the Revenue of Rs.23,123/- on account of loss on sale of motor car – Decided against Assessee. Disallowance of Premises User Expenses – Held that:- For the purpose of the examining the annexures submitted by the assessee, the matter should be remanded to the files of the AO – thus, the AO is directed to examine the annexures and the relevant material in this regard after providing a reasonable opportunity of being heard to the assessee – Decided in favour of Assessee. Disallowance of Interest on Overdraft & Unsecured Loans – Held that:- The Revenue has erred in holding that the assessee has given interest free advances but the explanation given by the assessee suggests that there are interest bearing expenses - most of them are Opening Balances and it is not clear whether the similar amounts are added in the year of advancing the alleged interest free advances - For this purpose, the matter is remitted back to the AO for examination of the issue – Decided in favour of Assessee.
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