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M/s Rifah Shoes Pvt. Ltd., Versus The Assistant Commissioner of Income Tax, Company Circle – V (4) , Chennai

2015 (5) TMI 1059 - ITAT CHENNAI

Allowable business expenditure - payments made to Hotels, Spa and purchase of apparels - Held that:- Admittedly, payments were made through credit card to Hotels/Resorts, Disney Vacancy purchase, apparels, Departmental stores, Spa, etc. These expenses were personal in nature. There is no material on record to show how these payments are going to promote the business of the assessee. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly confirmed the addition to .....

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on account of foreign travel. We do not find any infirmity in the order of the CIT(Appeals). Accordingly, the same is confirmed. - Disallowance towards repairs and renewals - Held that:- The assessee claims that a sum of ₹ 25,88,711/- was incurred in repairs and renewals of compound wall, relaying of connecting roads and construction of temporary dining hall for the workers. If it is a construction of new wall and new roads, it can be a capital expenditure, but, if it is repairs and .....

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set aside the orders of the lower authorities and the issue of repairs and renewals is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue afresh to find out whether it is a construction of new compound wall and roads. The Assessing Officer shall also reconsider the nature of temporary structure made by the assessee for dining hall. The Assessing Officer shall thereafter decide the issue in accordance with law after giving reasonable opportunity .....

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-11. 2. Sh. Raghav Prasad, the Ld. representative for the assessee, submitted that the first issue arises for consideration is with regard to disallowance of business promotion expenses to the extent of ₹ 15,77,819/-. According to the Ld. representative, the assessee had to incur certain expenditure in entertaining the customers in the hotel. The payments were made through credit card. According to the Ld. representative, the Assessing Officer disallowed 30% of the expenditure .....

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and purchase of apparels cannot be considered to be business expenditure. These are all personal expenditure of the directors of the company. Therefore, it cannot be allowed as business expenditure. 4. We have considered the rival submissions on either side and perused the relevant material on record. Admittedly, payments were made through credit card to Hotels/Resorts, Disney Vacancy purchase, apparels, Departmental stores, Spa, etc. These expenses were personal in nature. There is .....

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77; 22,14,876/- on account of foreign travel. The assessee explained before the Assessing Officer that the foreign travel has been made in connection with business of the assessee. The assessee however could not file the entire bills and vouchers before the Assessing Officer. The assessee was able to file bills and vouchers only to the extent of ₹ 8,24,256/-. Therefore, the Assessing Officer disallowed a sum of ₹ 13,90,620/-. On appeal by the assessee, the CIT(Appeals) confirmed the .....

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the expenditure, according to the Ld. D.R., the Assessing Officer restricted the claim only to the extent the assessee filed the bills and vouchers. 8. We have considered the rival submissions on either side and perused the relevant material on record. The assessee claimed expenditure relating to foreign travel. The assessee could not file any details. However, the bills and vouchers to the extent of ₹ 8,24,256/- were filed. In respect of the balance expenditure, no material was .....

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ntative. submitted that the assessee-company debited an amount of ₹ 25,88,711/- under the head repairs and renewals . According to the Ld. representative, the assessee incurred expenditure for construction of compound wall and relaying of connecting roads. According to the Ld. representative, major expenses had been used for construction of wall and relaying of connecting roads. According to the Ld. representative, the compound wall was damaged due to heavy rain. The assessee has also cons .....

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nue in nature. Therefore, the entire expenditure ought to have been allowed. 11. On the contrary, Shri S. Das Gupta, the Ld. D.R. submitted that the construction of dining hall for the workers, construction of connecting roads and walls are capital in nature. Therefore, the Assessing Officer has rightly treated the same as capital expenditure. The Ld. D.R. further submitted that the assessee did not file any proof with regard to repairs and expenditure on construction of temporary st .....

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