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2018 (10) TMI 54 - AT - Income TaxAllowable busniss expenditure - Gift Expenses, Business promotion expenses and Entertainment Expenses "wholly and exclusively” - Held that:- Looking to the nature of expenditure and nature of business activity of the assessee, it would reveal that these expenditures were not wholly required, in a sense, for the purpose of business or could it be termed that these expenses were exclusively incurred for the purpose of business. The ld.CIT(A) has examined this aspect in details and made reference to the decision in CONFEDERATION OF INDIAN PHARMACEUTICAL INDUSTRY (SSI) VERSUS CENTRAL BOARD OF DIRECT TAXES AND UNION OF INDIA [2013 (7) TMI 387 - HIMACHAL PRADESH HIGH COURT], and thereafter held that these expenses were not incurred for the promotion of the business. As pointed out by assessee, similar expenses were disallowed to it in earlier assessment years upto the level of the Tribunal, though order of the Tribunal has not been placed on record by either parties. But statement made at the Bar is sufficient for holding that such expenditure has been disallowed in the past also. Thus, in order to maintain consistency, these grounds of appeals are rejected in both the assessment years. Depreciation required to be granted to the assessee on the alleged life saving equipments - @40% OR 15% - Held that:- We find that a list of life saving medical equipments has been given in this Appendix on which deprecation at the rate of 40% is permissible. Where rate of depreciation has been provided on specific machinery, it is not to be granted on each and every machinery installed at the hospital. Thus, the ld.CIT(A) has rightly rejected the stand of the assessee. The depreciation is to be granted on the basis of rate provided in the table given in the Income Tax Rules. The machinery on which depreciation has been claimed by the assessee at 40% is not being provided in the Appendix. Therefore, the depreciation on such machinery is at 15% which has rightly been upheld by the ld.CIT(A). This ground of appeal is rejected in both years. Depreciation on certain electrical installation at 15% which has been restricted by the AO to 10% - Held that:- We find that depreciation has been restricted at the rate of 10% by the ld.AO because the assessee failed to demonstrate that electrical panel installed by it was part of the machinery. He considered electrical installation as independent asset than the medical equipments. CIT(A) has considered all these aspects in right perspective and no interference is called on this issue. Hence, this ground of appeal is also rejected.
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