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2020 (6) TMI 44 - AT - Income TaxDisallowance of the Prepaid Expenses - HELD THAT:- Upon perusal of financial statements and ledger extract, we find substance in the arguments of Ld. AR. The nature of the aforesaid expenditure is prepaid expenditure which is to be claimed in subsequent years. This being the case, the impugned addition could not be sustained and therefore, we delete the same. This ground stands allowed. Training Expenditure disallowance - HELD THAT:- We find that the action of Ld. AO in treating the said expenditure as capital expenditure was bereft of any merits. The expenditure was merely training expenditure to train the assessee’s employees qua new products. The assessee did not gained any benefit of enduring in nature. The said expenditure was rightly claimed as revenue expenditure. Ground No.2 stands allowed. Depreciation on office equipment - Purchases consisted of items such as coffee maker, T.V., microwave, washing machine which were installed at the residence of employees of the company and AO treating the same to be personal expenditure - HELD THAT:- The undisputed fact that emerges is that the fixed assets were purchased by the assessee and they entered into block of assets - simply because they were put at the disposal of employees, depreciation could not be denied to the assessee. Therefore, the disallowance made in this regard stand deleted. The ground stands allowed. Disallowance of gifts - cost of mangoes sent to Austria, Germany, Switzerland as gift on the occasion of marriage of one of the employees - AR has pleaded that there could be no question of any personal expenditure in case of a company and therefore, the said expenditure would be allowable - HELD THAT:- Going by the said argument, whatever expenditure was claimed by a corporate assessee, could never be disallowed despite non-fulfilment of conditions laid down by Sec. 37(1). Not convinced with the arguments, this addition stand confirmed. The ground stands dismissed. Capital Expenditure OR revenue expenditure - items under the head repair and maintenance expenditure claimed as revenue expenditure, were treated as capital expenditure and depreciation was allowed against the same - HELD THAT:- Going by the nature of expenditure, we find that these were routine repair and maintenance expenditure and therefore the same, by no stretch of imagination, could be treated as capital expenditure. Hence, the adjustment made in this regard, stand reversed. This ground stands allowed. Travelling Expenses - No supporting documents / vouchers were furnished - HELD THAT:- Without delving much deeper into the issue, we estimate the disallowance @10%. This ground stands partly allowed.
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