TMI Blog2004 (9) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... en off in the account of Shri H.C. Kohli. (2) That on the facts and circumstances of the case and in law the CIT(A) erred in confirming the disallowance out of travel expenses incurred on trip of Mrs. Naveen Kohli to Singapore. (3) That on the facts and circumstances of the case and in law the CIT(A) erred in confirming the action of the Assessing Officer in not excluding the sum of Rs. 1,56,699 from the total income on account of unclaimed balances written back in the profit and loss account. (4) That on the facts and circumstances of the case and in law the CIT(A) erred in not excluding from the total income the sum of Rs. 23,73,415 credited to the profit and loss account by way of provision no longer required written back towards unrealized profit for earlier year which was added back in the assessment year 1994-95 and instead restoring the matter to the Assessing Officer for passing a speaking order." During the course of hearing, the learned counsel for the assessee opted not to press ground No. 4. Accordingly, ground No. 4 is dismissed as not pressed. 4. Apropos Ground No. 1, it is noticed from the break up of the written off sums that the major sum of Rs. 1,59,27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses except the expenses incurred on foreign travel of his wife to Singapore. The order of the CIT(A) on this issue is assailed by the assessee as well as the revenue before the Tribunal. 7. During the course of hearing, the assessee has also filed the report of foreign travels and the name of the parties who were visited by its Managing Director during his foreign visit. The details of his foreign visit were also filed before the Assessing Officer. In respect of the disallowance made on account of foreign travel expenses incurred on the wife of Managing Director Mrs. Naveen Kohli, the assessee could not place any evidence on record to establish that the foreign visit of the wife of the Managing Director was necessary on account of any business need or to attend any Conference or Seminar in which the delegates were invited along with their spouses. In these circumstances, we find no justification in allowing the foreign travel expenses incurred on the wife of the Managing Director. From the material available on record, it is not clear as to how many countries are visited by the Managing Director along with his wife. We, therefore, set aside the order of the CIT(A) and res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and in the circumstances of the case, the ld. CIT(A) has erred in holding that it cannot be said that sufficient opportunity was given by the Assessing Officer to the assessee company for filing evidence and allowing the company to file fresh evidence before him in the appellate proceedings. (2) On the facts and in the circumstances of the case, the ld. CIT(A) has erred in holding that PF dues deposited within 5 grace days after 15th of the next month would not be disallowable under section 43B read with section 36(1)( va ) of the Income-tax Act and deleting the disallowance of Rs. 1,90,179. (3) On the facts and in the circumstances of the case, the ld. CIT(A) has erred in holding that the expenses incurred in foreign travel of Shri Naveen Kohli are admissible under section 37(1) without properly appreciating the fact that the assessee had no business needs for foreign travel and in the relevant previous year the assessee company had neither imported any material nor it had exported any finished goods to those countries and there was no nexus between these foreign trips and the business carried on by the assessee. (4) On the facts and in the circumstances of the case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has recorded in his order that item of expenses treated as deferred revenue expenditure were to be amortised over a period of five years from the year of incurrence. With this background, the Assessing Officer has held as under : "Thus, the commission paid for procurement of the contract cannot be allowed in one year as the income from all these contracts has not been disclosed in this year. Further the assessee did not furnish confirmation from the parties to whom commissions were paid. Copy of agreements with these parties have also not been furnished. The terms and conditions for payment of the commission have not been disclosed. Hence, the commission claimed as deduction at Rs. 29,64,687 is disallowed." 12. The assessee preferred an appeal before the CIT(A) with the contention that the Assessing Officer s main ground for disallowance of commission, namely, that the said expenditure has been shown as deferred revenue expenditure and should have been amortised over a period of five years is not tenable. In this regard, the assessee filed his written submissions, an extract of which is reproduced hereunder being relevant to the present controversy : "It may be mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. The best course available to the CIT(A) was to restore the matter to the Assessing Officer for examination of the details of commission and services rendered by the commission agent but the CIT(A) having admitted these evidences, accepted the claim of the assessee. 14. The learned counsel for the assessee, on the other hand, has submitted that the assessee has filed all the relevant evidences before the Assessing Officer but he did not examine the same and disallow the claim of the assessee. The CIT(A) who is armed with coterminous powers with that of the Assessing Officer, has examined these documents and after being satisfied with the nature of the claim and services rendered by the commission agent has allowed the claim of commission payment of the assessee. 15. Having considered the rival submissions and from careful perusal of the record, we find that the Assessing Officer has specifically observed in his order and in his remand report that the assessee did not file the relevant evidence. The evidences, which the CIT(A) considered were not available before him. We have also examined the details of payment and correspondence and we find that the bills were raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der for the assessment year 1994-95, he allowed the claim of the assessee. Aggrieved, the revenue has preferred an appeal before the Tribunal. 18. During the course of hearing, the learned Departmental Representative was specifically asked to find out the fate of the CIT(A) s order for the assessment year 1994-95 in which similar claim was allowed by him. Despite affording sufficient time to the Departmental Representative, he could not furnish that information about the fate of the CIT(A) s order. We, however, examined the details of development charges for software package and the orders of the CIT(A) and we find that the expenditure was incurred to upgrade the developing software and its upgradation in the present era of software technology has become necessary for the business consciousness and also to stand in the competitive market. It is also clear that software packages become obsolete very rapidly and rapid advancement of software cannot be ignored. We are, therefore, of the considered view that the CIT(A) has rightly allowed the claim of the assessee. Accordingly, the order of the CIT(A) is confirmed. 19. The ground No. 6 relates to the disallowance of 100% deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the order of the CIT(A) and restore it to the file of the Assessing Officer for verification that the shuttering material purchased by the assessee during the year was in fact put to use for the business purposes. If the assessee succeeds in proving its use in this financial year, the Assessing Officer is directed to allow 100% depreciation on shuttering material. Accordingly, this issue is disposed of. ITA No. 4416/Del./2000 : 21. In this appeal, the revenue assailed the order of the CIT(A) on the following grounds : "(1) On the facts and in the circumstances of the case, the ld. CIT(A) has erred in holding that PF dues deposited within grace period would not be disallowed under section 43B read with section 36(1)( va ) of the Income-tax Act and deleting the disallowance of Rs. 1,29,301. (2) On the facts and in the circumstances of the case, the ld. CIT(A) has erred in holding that the expenses incurred in foreign travel of Smt. Ashita Kohli while accompanying her husband in these trips are admissible under section 37(1) without properly appreciating the facts that the assessee has failed to provide any documentary evidences to prove the nexus between business needs/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
