TMI Blog2010 (12) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets, it only acquired right of connectivity for which payment was made. Since no capital asset was acquired by the assessee, so far as the assessee is concerned, it was revenue expenditure - Decided in favour of assessee. Replacement of doors and other related expenses - Revenue expenditure or capital expenditure - Find that the Assessing Officer made disallowance on the ground that expenditure was for purchase of new furniture. He therefore disallowed the expenditure as capital expenditure - At the time of hearing, learned counsel was unable to controvert the finding recorded by the Assessing Officer - Decided against of assessee. Telephone expenses - Find that the Assessing Officer disallowed telephone expenditure on the ground that expenses were incurred for purchase of new telephone instrument, therefore, it was capital expenditure - At the time of hearing, no argument was raised to controvert the above finding - Hence, decided against of assessee. Business promotion expenses - The Assessing Officer has disallowed the claim of Rs.30,875/- being business promotion expenses on the ground that no details were furnished. However, at the time of hearing before us, it was explai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 194(h) of the Income Tax Act. Therefore in view of Section 40(a)(ia), the payment of commission is not allowable. 5. The submission of the learned counsel in respect of the above three points is summarized as under: i) That the assessee furnished complete details before the Assessing Officer. It would be evident from the assessee's reply dated 5-9-2007, 28-9-2007 and 10-10-2007. The copies of these replies are placed at page no.127 to 132 of the assessee's paper book. That the assessee prepared a chart giving the complete details of the agents, customers brought by them and the address of the agent and the customers etc. Such details were produced before the learned Commissioner of Income Tax (Appeals) in the form of a chart which is placed at page no.116 to 126 of the assessee's paper book. That the ld. learned Commissioner of Income Tax (Appeals) refused to accept said chart holding the same as a fresh evidence. It is explained by the learned counsel that the chart is not an evidence but only a compilation from the details already on record of the department. He also furnished the affidavit of the director to this effect. He therefore submitted that after consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion would not be applicable. 7. With regard to the applicability of section 194(h), it is stated by the learned DR that since no such explanation was furnished before the Assessing Officer, it would be in the interest of justice, if the entire matter is set aside to the file of the Assessing Officer for re-examination of the case afresh. 8. We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the facts of the case and the rival submissions, in our opinion, it would meet ends of the justice, if the orders of the lower authorities, on this point is set aside and the matter is restored back to the file of the Assessing Officer. We direct him to allow adequate opportunity to the assessee to furnish necessary evidence/explanation in support of his contention and thereafter re-adjudicate the issue afresh in accordance with law. We also direct the assessee to furnish complete details as well as explanation before the Assessing Officer in this regard. 9. Ground No.5 of the assessee's appeal is against the disallowance of Rs.34,459/- out of traveling expenses. 10. We have heard both the parties and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in not considering that Rs.15,000/- being replacement of doors and other related expenses as revenue expenditure and considering it as capital expenditure on the facts and circumstances of the case." 16. We find that the Assessing Officer made disallowance on the ground that expenditure was for purchase of new furniture. He therefore disallowed the expenditure as capital expenditure. At the time of hearing before us, learned counsel was unable to controvert the finding recorded by the Assessing Officer. We therefore confirm the order of the learned Commissioner of Income Tax (Appeals) on this issue and reject the Ground No.7 of the assessee's appeal. 17. Ground No.8 of the appeal reads as under: "8. That the ld. CIT(A) erred in not considering that Rs.7,802/- out of telephone expenses as revenue expenditure and considering it as capital expenditure on the facts and circumstances of the case. The ld. CIT(A) ought to have directed to allow depreciation on considering it as capital expenditure." 18. We find that the Assessing Officer disallowed the sum of Rs.7,802/- out of total telephone expenditure of Rs.28,118/- on the ground that expenses were incurred for p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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