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2016 (6) TMI 477 - ITAT AHMEDABAD

2016 (6) TMI 477 - ITAT AHMEDABAD - TMI - Disallowance on account of insurance premium on two new vehicles - Held that:- In our considered opinion, the insurance claim of the assessee is not in respect of already existing assets but is in respect of purchase of two new motor vehicles. As per the Motor Vehicle Act, no vehicle is allowed to ply on the road without the insurance cover. Therefore, without the first insurance, it cannot be said that the vehicle has been put to use. Therefore, the fir .....

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ability. Since there is no categorical finding by the A.O that there is a remission or cessation of liability, we decline to interfere with the findings of the ld. CIT(A)

Disallowance u/s. 40(a)(ia) - Held that:- D.R. could not controvert the factual findings made by the ld. CIT(A) nor the ld. D.R. could point out any factual error in the findings of the ld. CIT(A). Since this is a case of reimbursement of expenditure, we decline to interfere with the findings of the ld. CIT(A). For t .....

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n - revenue v/s capital expenditure - Held that:- The assessee reiterated what has been stated before the lower authorities. At the very outset, we have to state that the expenditure in question has not been incurred for acquisition of any capital asset as such. The expenditure has been incurred for carrying out the business activities of the assessee as registration of the trade mark is essential so as to secure that the competitors do not infringe the rights of the assessee. Further, it is als .....

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bjection by the Assessee against the very same order of the ld. CIT(A)-XVI, Ahmedabad dated 28.12.2010 pertaining to A.Y. 2007-08. The appeal and the Cross Objection are disposed of by this common order for the sake of convenience. 2. The revenue has raised five substantive grounds of appeal:- 1. The ld. CIT(A)-XIV, Ahmedabad erred in law and on facts in deleting the addition of ₹ 15,00,000/- made by the Assessing Officer on account of valuation of closing stock. 2. The ld. CIT(A) has erre .....

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expenses without deducting Tax Deducted at Source. 5. The ld. CIT(A) has erred and on facts in deleting the disallowance of ₹ 3,84,079/- made by the Assessing Officer on account of expenses relating to Trade Mark Registration. 3. At the very outset, the counsel for the assessee stated that the grievance of the revenue taken in ground no. 1 has been decided in earlier years by the Tribunal/First Appellate Authority in favour of the assessee and against the revenue. The D.R. could not bring .....

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become final. While deciding the issue in favour of the assessee, it has been categorically stated that there is no change in the facts and circumstances during the year under consideration and, therefore, similar view is taken. 4. Thus, considering the entire facts and circumstances of the present case, we do not find any reason to interfere with the findings of the ld. CIT(A). Ground No. 1 is accordingly dismissed. 5. Ground no. 2 relates to the deletion of the disallowance of ₹ 45,238/- .....

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) deleted the disallowance holding that the payment of insurance premium on Motor Car purchased whether new or old, is an admissible item of expenditure and allowed the claim of the assessee. 7. Before us, the ld. D.R. strongly supported the findings of the A.O. Per contra, the ld. counsel for the assessee vehemently stated that motor vehicles are treated as plant as per the definition given u/s. 43(3) of the Act and since the insurance premium on plaint is allowed as revenue expenditure, the cl .....

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be said that the vehicle has been put to use. Therefore, the first insurance premium paid would go to increase the cost of the vehicle and, therefore, the same has been treated as capital expenditure. We accordingly set aside the findings of the ld. CIT(A) and restore that of the A.O. Ground no. 2 is allowed. 8. Ground no. 3 relates to the deletion of the addition of ₹ 2,89,289/- 9. While scrutinizing the balance sheet, the A.O found that following creditors on which no payment has been m .....

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bility would get barred by limitation, therefore, proceeded by treating ₹ 2,89,289/- as income of the assessee u/s. 41(1) of the Act. 11. The assessee carried the matter before the ld. CIT(A). After considering the facts and the circumstances, the ld. CIT(A) observed that there is no cessation or remission of liability during the year under consideration in respect of the amount payable, the liability has not ceased and the assessee has to pay the creditors. The ld. CIT(A) deleted the addi .....

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ility. Since there is no categorical finding by the A.O that there is a remission or cessation of liability, we decline to interfere with the findings of the ld. CIT(A). Ground no. 3 is accordingly dismissed. 13. Ground no. 4 relates to the deletion of the disallowance of ₹ 76,27,807/- made by the A.O u/s. 40(a)(ia) of the Act. 14. This issue has been considered by the A.O at page 6 on para 10 of his order wherein he has observed that the assessee has claimed expenditure of ₹ 1,09,57 .....

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violated the provisions of Section 40(a)(ia). The A.O made an addition of ₹ 76,27,807/-. 15. Aggrieved by this, the assessee carried the matter before the ld. CIT(A) and reiterated that the expenditures have been incurred by its employees and the assessee has simply reimbursed the same. Supporting documents were furnished before the ld. CIT(A) who after verifying the same observed that the supporting documents indicate the month-wise salary/DA paid to various employees and the reimburseme .....

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eved by this, the revenue is before us. The ld. D.R. could not controvert the factual findings made by the ld. CIT(A) nor the ld. D.R. could point out any factual error in the findings of the ld. CIT(A). Since this is a case of reimbursement of expenditure, we decline to interfere with the findings of the ld. CIT(A). For the sake of completion of the adjudication, we find that no additions on this account have been made in earlier assessment years nor any addition is made in subsequent assessmen .....

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2,106/- and has claimed the same as expenditure in relation to Trade Mark Registration. The A.O did not accept the contention of the assessee in claiming this expenditure as revenue expenditure. Since the trade mark is considered as a capital asset, the A.O treated ₹ 5,12,106/- as capital expenditure and allowed the claim of depreciation @ 25%. 19. Assessee carried the matter before the ld. CIT(A) and reiterated its claim of Trade Mark Registration as revenue expenditure. It was explained .....

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