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2017 (6) TMI 183 - AT - Income TaxAllowability of business expenditure - Held that:- The assessee is in the business of hiring taxis based on the calls received at the call centre and transferred to taxis at various destinations, which is popularly referred to call taxi services. From a perusal of the miscellaneous expenses it appears that the expenditure like taxi meters, printer for taxi meters, IVH ( to receive data from call centre) MDT which receives data from IVH etc, are included in the miscellaneous expenditure. The business model of the assessee is that the assessee hires cars owned by third parties and the assessee is not the owner of the cars. Therefore the aforesaid accessories which are required to render call taxi services cannot said to be items of capital expenditure. They are installed in the taxi owned by a third party. Therefore these items of expenses have to be regarded as revenue expenditure. We are of the view that the expenses in question cannot regarded to be as capital expenditure. Nevertheless allowability of expenses in question u/s 37(1) of the Act is also dependent on the condition that these expenses were incurred by the assessee for the purpose of business of the assessee. We therefore set aside the order of CIT(A) and remand the question to the AO for fresh consideration with a liberty to the assessee to file evidence to show incurring of these expenses by the assessee. We may also add that the accounting treatment given by the assessee in the books of accounts will not be decisive in the matter. With these observations, we allow the appeal of the assessee for statistical purposes.
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