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2015 (4) TMI 1256 - AT - Income TaxDepreciation @60% on all equipments falling under the head ‘Computers’ including ‘Bizebra Weighing Scale’ - whether the same is weighing scale and not included in the list of hardwares defined as ‘computer’? - Held that:- As observed that a computer, in common sense and as popularly understood, refers to any electronic or high speed data processing device which performs logical, arithmetic and memory functions on data whereas weighing scale fairly do not fall within the ambit of computer. These are only peripherals which draw support from computer for its functions. Most of the computers are used in coordinating with other machineries for weighing articles, generating cash memo, etc. Therefore the basic function of the weighing scale falls in the category of plant and machinery and depreciation @15% is allowed. CIT(A) merely reproduced the contentions of the assessee as well as the decision of the Special Bench of ITAT, Mumbai in the case of Datacraft India Ltd. [2010 (7) TMI 642 - ITAT, MUMBAI] and observed that weighing scale should be treated as computer hardware and accordingly allowed the claim of the assessee. It deserves to be noticed that the detailed functions of the weighing scale were not mentioned by the CIT(A). It is not known as to what are the substantial functions of the weighing scale and whether they can independently be operated or not, in order to consider as to whether they are part of computer hardware or not. We set aside the order of the CIT(A) and direct the AO to reconsider the matter by taking into consideration the technical details of the weighing scale and analyse the same in order to appreciate as to whether the functions of the weighing scale fall within the meaning of computer hardware as specified by the ITAT Special Bench in the case of Datacraft India Ltd. With these observations the appeal filed by the Revenue is treated as allowed for statistical purposes. Legal/professional and sales promotion expenses - to be treated as capital expenditure or revenue in nature - Held that:- Similar agreement was entered into with M/s. A.T. Kerney Ltd. and the payment was made for the launch of the retail business and therefore it has to be treated as pre-operative expenditure and it gives the assessee an enduring benefit in which event the expenditure has to be treated as capital in nature. Though the assessee filed a paper book, as per Rule 18(6) of the Appellate Tribunal Rules, only those papers which were referred to and relied upon by the parties during the course of arguments shall alone be treated as part of the record of the Tribunal whereas in the instant case none appeared before us and no material, whatsoever, was brought to our notice and therefore the paper book cannot be taken into consideration. Thus, the assessee has not brought any material to controvert the findings of the learned D.R. Even otherwise the paper book consists of copies of the agreements with three parties and the same were already considered by the CIT(A). Having regard to the circumstances of the case we do not find any infirmity in the order passed by the CIT(A) and accordingly we dismiss ground No. 1 of the assessee. Treating of foreign travelling expenditure as capital in nature - Held that:- CIT(A) considered the issue in para 5.3 of his order wherein he observed that foreign travel was for procuring capital goods and hence the AO was justified in disallowing an amount proportionate to the amount of capital goods imported. Here also no material was brought to our notice to controvert the findings of the CIT(A). We, therefore, do not find any justification to interfere with the order passed by the learned CIT(A) on this aspect. Therefore ground No. 2 of the assessee is rejected. Disallowance computed under section 14A read with Rule 8D - Held that:- Share application money is also an investment and it has to be considered in the investment while working out the average of investment and accordingly worked out the amount disallowable under section 14A read with Rule 8D. Here also no material, whatsoever, was placed to controvert the findings of the learned CIT(A). We, therefore, affirm the order of the learned CIT(A) on this aspect also and dismiss ground No. 3 of the assessee.
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