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2014 (8) TMI 723 - AT - Income TaxAddition u/s 35D Expenses on repair of work place - Whether the provisions of section 35D, at all, could be applicable on the assessee, where the assessee incurs expenses to repair the place of his work Held that:- The assessee is a wholesaler and retailer of musical goods, which he imports - assessee incurred expenses to repair the property/showroom taken on rent - Neither the assessee has incurred any expenditure in the extension of his undertaking nor has he set up a new unit - as per the submissions of the assessee extracted in the order, that the renovation work undertaken by the assessee at ₹ 11,93,820/- had been capitalized suo moto - the expenses are for the purposes of repairs on rented premises cannot be said to be preliminary expenses, eligible for amortization Decided in favour of Assessee. Personal expenditure - 1/3 Adhoc expenses disallowed New shop opened at NOIDA - Held that:- The assessee had opened a shop at Noida, while the assessee resides at Mumbai - involvement of personal nature of expense cannot be there - the expenses are routine business expenses, which has not been denied by either of the revenue authorities the expenses deserve to be allowed as there was no hint of personal usage in any of the expenses, noted by the revenue authorities - because of opening a new show room at Noida, the business has increased considerably - Along with the increase in business, the routine business expenses have also increased, as compared to the preceding year - the AO did not at all look into the comparative figures as produced before him - when the business has increased by 60.15%, it is obvious that corresponding expenses shall also increase - no disallowance is called for - the order of the CIT(A) is set aside and the AO is directed to delete the disallowance - Decided in favour of Assessee. Import Promotion Expenses Claim of depreciation Held that:- There is no term as import promotion expenses - the assessee has used the wrong term for the expenses which he has incurred - It is seen from the details as filed that the expenses had been incurred by the assessee for travelling abroad for the purpose of business, like buying tickets, foreign currency, stay etc. it has not been examined by the revenue authorities the assessee claimed depreciation against which, the AO allowed at ₹ 1,37,616/- and balance, the AO disallowed - as the CIT(A) observed that disallowance was made after the AO examined the bills of the fixed assets were produced before him - thus, the matter is remitted back to the CIT(A) for examination Decided in favour of Assessee.
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