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2018 (5) TMI 943 - AT - Income TaxDisallowance of relocation expenses - nature of expenditure - revenue or capital - whether expenses incurred in shifting the headquarters of the company to West Bengal are capital expenditure or revenue expenditure? - Held that:- In the case of Jamshedpur Engineering and Machine Manufacturing Company Limited (1985 (4) TMI 39 - PATNA High Court), shifting expenses of the registered office of the company have been held as capital expenditure being of enduring benefit nature. In the instant case also, the expenses are for re-installing Compactors at the new place as well as shifting of old equipments to the new place, which has provided assessee benefit of a centrally located place and, thus, the expenditure of enduring nature. The shifting of office is not regular phenomena of the business activity of the assessee and these one time expenses are towards creating a new office. Accordingly, we do not find any infirmity in finding of the Ld. DRP in upholding the same as capital expenditure and accordingly, we uphold the same. Relocation expenses on employees - Held that:- Expenses in question have been incurred on hotel stay, food charges, laundry charges etc. of two employees during their stay in Mumbai. Further, expenses of ₹ 1,03,316/- have been incurred towards octroi charges of car of the employee, transporting of goods of the employee, brokerage charges for taking new flat on rent etc. Since the expenses are related to relocation process of the office, following the decision of the Hon’ble Patna High Court in the case of Jamshedpur Engineering and Machine Manufacturing Company Limited (supra), the expenses are held to be in the nature of capital, and accordingly, we uphold the decision of the Ld. DRP on the issue in dispute. The ground of the appeal of the assessee is accordingly dismissed. Disallowance u/s 40(a)(ia) - non-deduction of tax at source on communication expenses and advertisement expenses - Held that:- The plea of the assessee of reversal of entry in respect of communication charges has been made first time before the Tribunal and need verification by the Assessing Officer in the light of books of account, financial statements of the assessee for the year under consideration. Similarly, the claim of deduction of tax at source and payment thereof in respect of advertisement expenses also need verification by the Assessing Officer from the TDS returns along with enclosures filed by the assessee to the Income Tax Department. In view of above, we feel it appropriate to restore this issue to the file of the Assessing Officer for verification of the facts and decide in accordance with law. The assessee shall furnish all the necessary documents in support of its claim of reversal of entry in relation to communication expenses and deduction & payment of TDS in relation to advertisement expenses
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