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2015 (6) TMI 883 - ITAT DELHI

2015 (6) TMI 883 - ITAT DELHI - TMI - Disallowance of repairs and maintenance expenses - revenue v/s capital expenditure - CIT(A) deleted addition - Though the assessee stated before the AO that the expenditure of ₹ 30.40 lac was of revenue nature, but it changed its stand before the ld. CIT(A) and contended that these machines were, in fact, capitalized by the assessee voluntarily and the observations of the AO in this regard were wrong. It is evident that there is an apparent contradicti .....

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the assessee before the ld. CIT(A) in arguing that this amount was, in fact, capitalized for the purposes of claiming depreciation. - Decided in favour of assessee for statistical purposes.

Addition u/s 43B - Held that:- There is an absence of details in this regard to demonstrate as to whether or not the sum of ₹ 18,207/-, in fact, remained payable as work contract tax. Under such circumstances, we set aside the impugned order and remit the matter to the file of AO for vetting .....

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GUJARAT High Court) has held that there cannot be any disallowance of personal expenses for cars on account of personal use by the director. It has been further held that no disallowance can be made even by treating such expenditure as not having been incurred for the business purpose. Similar view has been taken in Dy. CIT vs. Haryana Oxygen Ltd. (1999 (12) TMI 107 - ITAT DELHI-D). In view of the above decisions, we hold that the ld. CIT(A) was not justified in sustaining the disallowance to th .....

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he matter back to the file of AO for elaborately discussing the nature of such expenditure and then deciding the issue afresh as per law, after entertaining objections from the assessee. - Decided in favour of assessee for statistical purposes - ITA No.3587/Del/2013, CO No.301/Del/2014 - Dated:- 7-5-2015 - R. S. Syal, AM And A. T. Varkey, JM,JJ. For the Appellants : Shri K Sampath & Shri Raja Kumar, Advs. For the Respondent : Ms Y. Kakkar, DR ORDER Per R S Syal,AM This appeal by the Revenue .....

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in fact, on account of purchase of Plant and machinery as under:- Bill Date Vendor Amount Items 11.01.2008 Cimbali SPA Rs.2793683.23 LA Cimbali Coffee machine Junior grinder silver & LA Cimbali Inoxba TUV coffee grinders. Cimbali SPA Rs.121237.62 Cimbali SPA Rs.125271.95 Total Rs.30,40,193/ 3. As the assessee is engaged in the business of Coffee bars, the AO opined that the Coffee machines and coffee grinders constituted its capital assets. He held such assets to be profit earning apparatus .....

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d perusing the relevant material on record, it is observed that though the assessee stated before the AO that the expenditure of ₹ 30.40 lac was of revenue nature, but it changed its stand before the ld. CIT(A) and contended that these machines were, in fact, capitalized by the assessee voluntarily and the observations of the AO in this regard were wrong. It is evident that there is an apparent contradiction between the stand taken by the assessee before the AO on one hand and the ld. CIT( .....

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t this amount was, in fact, capitalized for the purposes of claiming depreciation. If such a claim is found to be correct, then, of course, there cannot be any question of making addition for ₹ 28.12 lac. If, on the other hand, the sum of ₹ 30.40 lac is found to have been claimed as revenue expenditure, then, the addition of ₹ 28.12 lac be restored, inasmuch as the expenditure incurred towards coffee machines and coffee grinders is otherwise a capital expenditure, being a profi .....

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total income. The AO made addition for the said sum. It was argued before the ld. CIT(A) that the tax auditor inadvertently qualified the audit report by mentioning that the said sum was contract tax disallowable u/s 43B of the Act. The ld. AR contended that there is no amount of tax payable by the assessee. We find that there is an absence of details in this regard to demonstrate as to whether or not the sum of ₹ 18,207/-, in fact, remained payable as work contract tax. Under such circum .....

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propos this ground are that the assessee claimed deduction for entertainment expenses amounting to ₹ 95,899/- which included personal expenses of director Partha Dutta Gupta amounting to ₹ 45,992/- for Pizza and dinners, etc. Staff welfare expenses amounting to ₹ 19,55,074/- included personal expenses of Shri Partha Dutta Gupta amounting to ₹ 42,378/-. The AO made total addition of ₹ 3,37,784/- by treating such total amount, including a sum of ₹ 88,370/-, as p .....

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onal use by its Directors. The Hon ble Gujarat High Court in Sayaji Iron and Engineering Company vs. CIT (2002) 253 ITR 749 (Guj) has held that there cannot be any disallowance of personal expenses for cars on account of personal use by the director. It has been further held that no disallowance can be made even by treating such expenditure as not having been incurred for the business purpose. Similar view has been taken by the Delhi Bench of the Tribunal in several cases including Dy. CIT vs. H .....

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