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2017 (1) TMI 618 - ITAT DELHI

2017 (1) TMI 618 - ITAT DELHI - TMI - Rate of depreciation on CCTV cameras - Held that:- CCTV cameras cannot function without computer, as to see the footage captured by CCTV camera you need a device in the shape of computer and thus, Computer is an integral part of CCTV camera and as such, is eligible for depreciation at the rate of 60% as prescribed for Computers under the Income Tax Act and accordingly, allow the depreciation @ 60% on the issue in dispute. See Commissioner of Income Tax Versu .....

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nternational Limited reported in [2008 (8) TMI 138 - DELHI HIGH COURT ] wherein it has been held that expenses incurred for advertisement and sales promotion and brand building are allowable expenses. - Disallowance expenditure(i.e. 10% of the telephone expense and vehicle running and maintenance expenses and 40% of the festival expenses) - Held that:- The disallowance made by AO are without any basis and purely adhoc disallowances made for personal use or vouchers in the hands of the compan .....

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ent of the company - Held that:- As find that the expenditure of ₹ 20,000/- was paid for brand promotion and effective marketing of company's products and services, as is evident from the receipt filed at page 166 of the paper book. Hence, the addition in dispute is deleted. Also find that even otherwise the assessee is eligible for deduction under section 80G of the I.T. Act, 1961. See CIT vs. Salora International Limited [2008 (8) TMI 138 - DELHI HIGH COURT ] wherein, it has been held th .....

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d in the Appeal read as under:- That the impugned order dated 18.02.2016 received on 22.03.2016 is being challenged the following amongst other ground of which may be taken into consideration while adjudication the said appeal. 1. That the Learned CIT (A) has grossly erred both on facts and law in passing the impugned order without providing the sufficient opportunity of being heard to the assessee thus passing the order violating the principles of natural justice. 2. That the notice dated 31/12 .....

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Learned CIT (A) that the previous present CIT (A) has got transferred and fresh notice will be sent for next date of hearing. The new CIT (A) has sent the fresh notice in the month of October 2015 fixing the date of hearing for 09/11/2015, which was duly attended to by the assessee. 5. Without prejudice to the above grounds, the learned CIT(A) has grossly erred in confirming the addition made by the Learned Assessing Officer who has ignored the facts and circumstances of the Appellant Company a .....

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nts in favour of the Appellant Company relied upon by it has provided no opportunity to assessee company to explain the same. 7. That the learned CIT(A) has grossly erred in confirming the addition made by the Learned Assessing Officer who has grossly erred in disallowing expenditure of ₹ 51,000 (advertisement expenses) without appreciating that the advertisement expenses have been incurred exclusively for the business development purposes. The Learned Assessing Officer has totally ignored .....

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idering them as personal expenses without any material evidence or basis. The Learned Assessing Officer has failed to recognize the fact that Assessee is an artificial judicial person having separate legal entity. Hence, there can be no personal expense. Therefore, expenditure has been incurred exclusively for the business purpose. This fact has not been examined by the Ld. CIT(A) and has provided no opportunity to assessee company to explain the same. 9. That the Ld. CIT(A) has grossly erred in .....

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g the addition made by the Ld. Assessing Officer who has grossly erred in disallowing the donation of ₹ 20,000/- which had been made for the purpose of advertisement of the company. Hence, incurred exclusively for the business purpose. The Assessing officer has ignored the facts and circumstances of the Appellant Company. This fact has not been examined by the Ld. CIT(A) and has provided no opportunity to assessee company to explain the same. 11. That the learned CIT(A) has grossly erred i .....

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ssly erred in initiating penalty u/s 271 (1) (c) of the Income Tax Act, 1961 for revising return of income by the assessee to withdraw the depreciation claimed on rented premises after receipt of scrutiny notice without appreciating the fact that no penalty can be imposed as return of income being revised by the assessee suo moto before any query/ questionnaire was raised in this regard by the Learned Assessing Officer. 13. That the learned CIT(A) has grossly erred in not adjudicating the levyin .....

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d on 27.9.2013 at an income of ₹ 45,80,280/-. The assesee company is engaged in the business of consultancy. The case was selected for scrutiny under CASS and statutory notice under section 143(2) of the I.T. Act, 1961 on 7.8.2013 and served upon to the assessee, fixing the case for 20.8.2013. A detailed questionnaire alongwith notices u/s. 142(1)/143(2) of the Act were issued on 9.12.2013 which were duly served upon the assessee. Due to change of address, fresh notices were issued on 10.1 .....

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he Ld. CIT(A), who vide impugned order dated 18.2.2016 has dismissed the appeal of the assessee by affirming the action of the AO. 5. Against the aforesaid order of the Ld. CIT(A), assessee is in appeal before the Tribunal. 6. At the time of hearing, ld. Counsel of the assessee has not pressed the ground no. 1 to 4 hence, the ground no. 1 to 4 stand dismissed as not pressed. 6.1 With regard to ground no. 5 & 6 are concerned, these are relating to allowing the lower rate of depreciation on CC .....

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and perused the records, I find force in the contention of the Ld. Counsel of the assessee that CCTV cameras cannot function without computer, as to see the footage captured by CCTV camera you need a device in the shape of computer and thus, Computer is an integral part of CCTV camera and as such, is eligible for depreciation at the rate of 60% as prescribed for Computers under the Income Tax Act and accordingly, allow the depreciation @ 60% on the issue in dispute. My view is fully supported b .....

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for advertisement in District Directory for good and effective medium for company's products and services. He stated that it is a settled law that the expenses incurred for advertisement and sales promotion and brand building are allowable expenses. 6.2.1 On the other hand, Ld. DR relied upon the orders of authorities below on the issue in dispute. 6.2.2 I have both the parties and perused the records, I find that the said expenditure was genuine one as the same was paid to Lion Club for adv .....

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no. 8 & 9 relating to adhoc disallowance expenditure of ₹ 1,24,003/- (i.e. 10% of the telephone expense and vehicle running and maintenance expenses) and disallowing the amount of ₹ 36,056/- (40% of the festival expenses) are concerned. In this regard, assessee counsel has submitted that the said disallowances made by learned AO are without any basis and purely adhoc disallowances made for personal use or vouchers in the hands of the company, especially when no specific defects h .....

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running and maintenance expenses) made by AO are without any basis and purely adhoc disallowances made for personal use or vouchers in the hands of the company which is not permissible in the eyes of law. I also note that the disallowance of ₹ 36,056/- (40% of the festival expenses) has been incurred exclusively for the business purpose and all the payments had been through bank with proper supporting vouchers, hence, both the additions in dispute are deleted. To support this contention, I .....

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