TMI Blog2003 (12) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... and since the assessee was also executing similar projects, the expenses incurred on the foreign tour was very much for the business of the assessee. But, no details of the expenses incurred was submitted and no documents/evidence had been filed to establish the business necessity of the above mentioned foreign travel. No reply regarding wife s travel had been given and under the circumstances, the Assessing Officer disallowed the claim of foreign travel expenses of Rs. 1,28,280. On appeal, the learned CIT(A) also agreed with the Assessing Officer and confirmed the disallowance by holding that no evidence has been filed which could prove the fact that the travel undertaken by Mr. Mrs. R.N. Ghanekar was for the purpose of business. Now the assessee is in further appeal before us. 4. The learned A.R. argued that since the assessee was engaged in executing sewerage project and the foreign tour was conducted by the assessee to study the latest technology used in the western countries in the sewerage projects the tour is very much for the business purpose and the expenditure incurred on this tour shall be allowed as business expenses. 5. The learned DR argued that since no de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justification to interfere in the order of learned CIT(A). This ground of the assessee fails. 7. The second ground of the appeal is as under : "2. The learned CIT(Appeals) erred in confirming the action of the Dy. CIT in disallowing the appellant s claim for deduction of Rs. 1,80,643 out of repairs and maintenance expenses, wrongly treating the same as capital expenditure." 8. During the year, the assessee had debited Rs. 1,97,016 under the head "repairs and maintenance". Out of this, Rs. 1,67.870 has been paid to M/s. Spectrum Furnishing, the details of which is appearing on page No. 5 of the assessment order and Rs. 29,053 has been paid to M/s. Preet Decor, the details of which are on page No. 4 of the assessment order. Out of this, Rs. 1,80,643 has been held by the Assessing Officer of capital in nature and was disallowed. On appeal, the learned CIT(A) also held that the impugned expenditure is for the complete restructuring of the office and is of capital in nature and has sustained the addition. Now the assessee is in further appeal before us. 9. In course of arguments before us, learned AR explained each and every item of expenditure as appearing on page Nos. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment does not help the case of the assessee because in this judgment, the issue involved was whether repairs to furniture can be disallowed as guest house expenses. The learned AR also relied upon some Tribunal orders in Anil Dev Das v. ITO [1995] 54 ITD 139 (Chd.), J.K. Synthetics Ltd. v. ITO [1990] 32 ITD 775 (Delhi). In Asstt. CIT v. Hindustan Marketing Advertising Co. Ltd. [1994] 49 TTJ (Delhi) 96 and J.K. Synthetics Ltd. s case ( supra ), it was held that expenditure incurred by the assessee company on toilet fittings and wall penalling pelmets was an allowable revenue expenditure. In 52 ITD 139 ( sic ) it was held that the expenses incurred on urgent repairs and renovation work and to give a new look to the business premises to attract customers and to run business more efficiently and profitably, was allowable as revenue expenditure. In Hindustan Marketing Advertising Co. Ltd. s case ( supra ) it was held that the aim and object of incurring the expenses is to make the decor attractive for customers which was essential for advertising business, allowable as revenue in nature. 12. Out of the bill amounting to Rs. 99,600, the details of which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case laws cited before us and we are of the considered opinion that except the expenses of Rs. 6,300 incurred on MS Grills which is admitted by learned AR being of capital in nature, the balance expenses are of revenue in nature and accordingly, we confirm the order of learned CIT(A) to the extend of Rs. 6300 and direct the Assessing Officer to allow the balance amount of Rs. 1,74,343 as revenue expenditure out of the total Rs. 1,80,643. On this ground the assessee succeeds partly. 16. The next ground is as under : "3. The learned CIT (Appeals) erred in confirming the action of the Dy. CIT in disallowing the appellant s claim for an amount of Rs. 1,20,000 out of legal and professional fees wrongly treating the same as not being incurred for business purpose." Briefly stated the facts of the case are that the assessee has made a payment of Rs. 1,44,000 to a company M/s. Hi-Calibre Investment Holding P. Ltd. It was explained by the assessee to the Assessing Officer that this payment was made towards retainership fees for professional services rendered in connection with supervision of Account, management consultancy from time to time and fees for financial consultancy for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue is fully covered in favour of the assessee by the two judgments of Hon ble Apex Court relied upon by learned AR and hence, under the facts and circumstances of the case, we do not find any merit and justification in the action of the Assessing Officer to determine the quantum of expenditure and direct the Assessing Officer to delete this disallowance of Rs. 1,20,000. The assessee succeeds on this ground. 20. The next ground of appeal is as under : "The learned CIT (Appeals) erred in confirming the action of the Dy. CIT in disallowing the appellant s claim for deduction of Rs. 21,00,000 being the consultancy charges paid to M/s. Contessa Construction and Leasing Co. Ltd. wrongly treating the same as not being incurred wholly and exclusively for the purposes of appellant s business." Briefly stated the facts of the case are that a work was awarded to the assessee firm by Bombay Municipal Corporation (BMC) on 6th July, 1983 and the work commenced on 1st August, 1983. Due to some disputes between the assessee and BMC, the work was suspended in March 85. The assessee firm lodged a claim of Rs. 1.7 crores on BMC, the details of which is appearing on page No. 106 of the pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust 93 itself is the evidence that they had rendered the services. 22. It was argued by the learned DR that there is no correspondence between the Consultant C.C. L.C. and BMC to prove the services rendered by C.C. L.C. and no bill had been raised by C.C. L.C. on the assessee. It was also argued that C.C. L.C. s track record of undertaking this type of laising work by them is never brought on record and as per learned DR, there was not need of any consultant after the award in favour of assessee. Reliance was placed on the assessment order and order of CIT(A) and it was vehemently argued that in the absence of any evidence regarding the services rendered by the Consultant, the disallowance is fully justified. It was also argued that only the agreement is not sufficient to allow the commission payment, and neither the payment is sufficient to allow this type of payment, unless rendering of service is established. Reliance was placed on the following judgments : ( a ) Lachminarayan Madan Lal v. CIT [1972] 86 ITR 439 (SC) ( b ) Assam Pesticides Agro Chemicals v. CIT [1997] 227 ITR 846 (Gauhati) ( c ) CIT v. Ramdas Ramlal [1984] 149 ITR 256 (MP) ( d ) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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