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2022 (10) TMI 1141 - ITAT CUTTACKNature of expenses - lease right payment - Revenue or capital expenditure - HELD THAT:- CIT(A) clearly shows that the ld. CIT(A) has recorded the facts that the lease was only for a period of eight months and further renewal of 11 months subject to satisfactory performance. It is noticed that the ld. CIT(A) has taken on record that the lease was for the period from 20.07.2007 to 31.03.2008 and further renewal of 11 months subject to satisfactory performance and that the lease was cancelled on 09.08.2011 and the assessee was in Writ before the Hon’ble Jurisdictional High Court. This being so, we are of the view that the CIT(A) is right in holding that the lease right payment does not give any enduring benefit to the assessee and it is a revenue expenditure. Addition representing the crushing activity which the assessee has not offered in its return - HELD THAT:- A perusal of the order of the ld. CIT(A) clearly shows that he has called for the said seized document i.e. BMD-10 and the same was not produced and in the remand report the AO had categorically admitted that the seized document was not available. This being so, in absence of corroborating evidence being the seized material, we are of the view that the ld. CIT(A) was right in deleting the addition made by the AO in respect of crushing activity. Disallowance of 10% of the export expenses less custom duty - HELD THAT:- A perusal of the order of the ld. CIT(A), it is noticed that the ld. CIT(A) when disallowing 10% out of the administrative and other expenses, has directed to reduce the director’s remuneration. In fact, this is a right method insofar as the director’s remuneration has already been taxed in the hands of the directors. So further taxing the same in the hands of the assessee would actually be a miscarriage of justice. Further in the interest of justice, we are of the view that the disallowance at 10% as made by the ld. CIT(A) is excessive and the same is reduced to 5%. Export expenses - HELD THAT:- We are of the view that the ld. CIT(A) is right in directing the exclusion of the export duty insofar as the same is a payment made to the Government. However, it is noticed that the ld.CIT(A) has directed for disallowance of 10% out of export expenses and in the interest of justice the same is also reduced to 5%. Assessee appeal is partly allowed.
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