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2016 (7) TMI 164 - AT - Income TaxDisallowance of claim for deduction of development expenditure u/s. 37(1) or in the alternative, u/s. 35(1) of the Act, allowing depreciation thereon instead - Held that:- The expenditure was toward setting up a new, dedicated unit to roll out new types of vehicles, which commenced commercial production in May, 2010. The expenditure was accordingly capital expenditure, entitled to depreciation u/s.32(1)(i) of the Act. The company was here-in-before manufacturing only Light Commercial Vehicles (LCVs) (at Zaheerabad, Andhra Pradesh), and the new project entailed transfer of the technical know-how, again, a capital asset depreciable u/s. 32(1)(ii) and, accordingly, allowed depreciation thereon. At the outset, the ld. AR would concede that the issue stands squarely covered against the assessee by the order by the Tribunal in the case of its’ associate concern.In our view, the Revenue’s stand, upheld by the tribunal in the cited decision, is in consonance with the first accounting and legal principles. We, accordingly, endorse same. - Decided in favour of revenue Disallowance u/s. 40(a)(ia) - non-deduction of tax at sourceon ‘service coupon commission’ - Held that:- we only consider it fit and proper that the matter is restored back to the file of the AO for allowing an opportunity to the assessee to satisfy him of being not in default under the amended section 201. That is, in respect of the tax deductible on the payment against service coupons, which it was liable to deduct u/s. 194C and has admittedly failed to deduct in whole. The burden of proof is clearly on the assessee, even as the AO shall decide the matter by issuing definite findings of fact and, further, separately for each dealer, whose cases could well be different in-as-much as the date of furnishing of return of income (for the relevant year) could be different, and may have perhaps also accounted for the income (on services) for different years. We decide accordingly.
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