TMI Blog2010 (2) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In the circumstances and facts of the case the learned CIT(A) has rightly accepted the explanation of the assessee Current repairs - repair and maintenance on account of expenditure incurred for installation on concrete interlocking blocks, mud phaska tiles, glazed doors and fixing charges - held that:- by incurring such expenditure in the rented premises the assessee has not created any new capital asset and therefore, the learned CIT(A) has rightly deleted the addition made by the AO relying upon the decision of Hon'ble Delhi High Court in the case of Instalment Supply Pvt. Ltd. (1983 -TMI - 27896 - DELHI High Court). - Decided in favor of assessee. Expenditure on foreign travel - Held that:- the visit of Ajay Muttreja is meant for the business purpose and nothing is on record to show that any expenditure for the personal purpose has been incurred - the observation of the learned CIT(A) that the assesse has not submitted various details for the visits of Shri Abhey Yograj and Neera Yograj cannot be accepted and moreover, there is nothing on record to show that these visits of the said persons are personal visits and nothing can be concluded on surmises and conjectures specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard the rival contentions and perused the facts of the case. The learned DR Shri G.S. Sahota relied upon the order of the AO and argued that the purchase of the flowers enhances the reputation of the assessee which is of enduring in nature and therefore, the said expenditure has rightly been treated as capital expenditure by the AO. On the other hand, the learned counsel for the assessee Shri Ashwani Taneja, CA relied upon the order of the learned CIT(A). In the present case the assessee has purchased fresh flowers and ornamental plants, which are perishable in nature. The AO has not doubted the genuineness of the expenditure. The test applied by the AO that the expenditure on flowers enhances the assessee's image and is of enduring in nature is without any basis and the same cannot be applied mechanically without having regard to the particular facts and circumstances of the case. In the present case the assessee has earned a consultancy receipts of Rs.2,68,08,545/- and expenditure of Rs.1,87,623/- appears to be reasonable and cannot be said to be excessive. By incurring such an expenditure no asset of enduring nature is created by the assessee and therefore, in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .7,09,136/- is made on account of leave encashment. Assessee has also been asked provide the documentary evidences for creating this liability i.e. in the shape of claims to be forwarded by the employees which remained pending as on 31.3.2001 etc. but here also, assessee failed to furnish any evidences. As the provision for this liability is credited without any evidences, hence, the same shall be disallowed treating this as a contingent liability and added back to the income. Concealment penalty proceedings u/s 271(1)(c) shall be initiated for the same." The learned CIT(A) vide Para 14.1 of his order held that the provision has been made on the basis of scheme of leave encashment which permits quantification of estimated liability and the deduction of the provision is allowable although the liability is discharged at a future date. The said provision is based on the actuarial valuation certificate. The learned CIT(A) on the similar facts relied upon the decision of Hon'ble Supreme Court in the case of Bharat Earth Movers vs. CIT, 245 ITR 428 and in the case of Metal Box Co. of India Ltd. vs. Their Workmen, 73 ITR 53 (SC) and accordingly allowed the claim of the assessee. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT, 149 ITR 52 (Del) and CIT vs. Hi Line Pens Pvt. Ltd. (2008 306 ITR 182 (Del) on the similar facts. In the present case the expenses incurred by the assessee were towards repair of the premises taken on lease to make them more conducive to its business activities and no new capital asset has been created and there was no intention of the assessee to bring any new capital asset into existence. Therefore, such expenditure on the repairs could fall under section 30(a)(i) which is an allowable expenditure. In the circumstances and facts of the case the learned CIT(A) has rightly accepted the explanation of the assessee and we find no infirmity in his order. Thus ground No.3 of the revenue is dismissed. 11. Ground No.4 of the revenue reads as under:- "On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.1,60,000/- made by the Assessing Officer out of repair and maintenance on account of expenditure incurred for installation on concrete interlocking blocks, mud phaska tiles, glazed doors and fixing charges." 12. The brief facts of the case as per Para 9 at Page 7 of the Assessing Officer's order are as under:- "Repai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.19,43,477/-. The AO added the same to the income of the assessee. Before the learned CIT(A) the assessee filed all confirmations which could not be submitted during the assessment proceedings as an additional evidence under Rule 46A of the Income-tax Rules and the learned CIT(A) forwarded the same to the AO for comments. The AO in the report dated 25.01.2005 submitted to the CIT(A) that the additional evidence submitted by the assessee company may be admitted and the case may be decided on merits. The learned CIT(A) by accepting the confirmations and the explanation of the assessee, deleted the addition made by the AO. 16. We have heard the rival contentions and perused the facts of the case. There is no dispute to the fact that the assessee could not furnish certain confirmations during the assessment proceedings which were filed before the learned CIT(A) as an additional evidence and after the remand report all the confirmations were considered by the learned CIT(A) which contains the confirmation of receipt of payment and the Income-tax particulars of each party. The assessee had been making similar professional payments in the normal course of business, which were allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28 of his order observed that Shri Ajay Muttreja undertook the foreign visits for the purpose of business. Whereas the visits undertaken by Shri Abhey Yograj and Neera Yograj to Belgium, France, Singapore, Australia, Switzerland, Italy had no apparent business purpose. The reasons given by the learned CIT(A) for considering such expenditure for non-business purpose is that any foreign visit for the purpose of business would be preceded by contact with potential collaborators or clients. The visit would be followed by exchange of messages and detailed business negotiations. No such evidence is on record and accordingly the learned CIT(A) upheld the action of the AO for disallowance of expenditure on foreign visit to the tune of Rs.17,50,044/- and granted relief of Rs.7,30,010/- vide Para 28 of his order. 19. We have heard the rival contentions and perused the facts of the case. We concur with the views of the learned CIT(A) that the visit of Ajay Muttreja is meant for the business purpose and nothing is on record to show that any expenditure for the personal purpose has been incurred by Shri Ajay Muttreja. Therefore, the learned CIT(A) after admitting the additional evidence an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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