TMI Blog2017 (12) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... to have completely discharged the responsibility. At the same time, we cannot fully disallow the said claim, since the expenditure was of routine nature type like travelling, conveyance etc. Under these set of facts, we are of the view that the disallowance may be restricted to 25% of the amount of ₹ 7.30 lakhs in order to take care of deficiencies and other disallowable nature of expenses. In our view, this will put this issue at rest. Accordingly, we modify the order passed by Ld CIT(A) on this issue and direct the AO to restrict the disallowance out of miscellaneous expenses to 25% of ₹ 7.30 lakhs. We order accordingly. Nature of expenditure - expenditure relating to purchase of know-how - revenue or capital - Held that:- CIT(A) noticed that identical payments made by the assessee has been allowed by his predecessor in the assessee’s own case in AY 2000-01 to 2006-07 [2016 (8) TMI 1309 - ITAT MUMBAI]. Also the assessee has earned service fee of ₹ 40.51 crores and in the course of earning the same, the assessee has incurred impugned expenditure, which mainly consisted of payments made to various consultants. Accordingly the Ld CIT(A) correctly held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through computer systems and control is also exercised through computers. Hence higher rate of depreciation applicable to computers should be allowed thereon. He further submitted that SMC bench of Delhi has considered an identical issue in the case of M/s Megasoft Solutions (India) P Ltd (ITA No.2831/Del/2016 dated 03-01-2017) and has held that the CCTV camera systems are peripherals of computer systems and hence higher rate of depreciation is admissible. 4. On the contrary, the Ld D.R submitted that the CCTV cameras and Control access systems may be operated through Computers, but they cannot fall under the definition of Computers. 5. Having heard rival submissions, we tend to agree with the contentions of the assessee, since identical issue has been decided in favour of the assessee by the Delhi SMC bench of ITAT. We notice that the Delhi bench has taken the support of the decision rendered by Hon ble Delhi High Court in the case of CIT Vs. Citicorp Maruti Finance Ltd (ITA No.1712/2012 and CIT Vs. Bonanza Portfolio Ltd (202 Taxman 545) to decide the issue. The Ld A.R submitted that, in both the above decisions, it has been held that the computer peripherals are eligible f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intained at Bangalore location, which could not be readily traceable due to frequent shifting of premises. Whatever may be the reason for non-furnishing of vouchers/details, it is the settled proposition of law that the onus to prove the expenditure claim is placed upon the assessee. Hence, with regard to the amount of ₹ 7.30 lakhs, the assessee cannot be said to have completely discharged the responsibility. At the same time, we cannot fully disallow the said claim, since the expenditure was of routine nature type like travelling, conveyance etc. Under these set of facts, we are of the view that the disallowance may be restricted to 25% of the amount of ₹ 7.30 lakhs in order to take care of deficiencies and other disallowable nature of expenses. In our view, this will put this issue at rest. Accordingly, we modify the order passed by Ld CIT(A) on this issue and direct the AO to restrict the disallowance out of miscellaneous expenses to 25% of ₹ 7.30 lakhs. We order accordingly. 9. We shall now take up the appeal filed by the revenue for AY 2007-08. The first issue relates to the expenditure relating to purchase of know-how. The assessee had claimed a sum of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed the order passed by the Tribunal on identical issue in AY 2002-03 and the same rate of disallowance was followed by the Tribunal in AY 2004-05 and 2005-06, we do not find any infirmity in the order passed by Ld CIT(A) on this issue. Accordingly we confirm his order passed on this issue. 15. The next issue contested by the revenue relates to the disallowance of ₹ 44.78 lakhs relating to repair expenses. The AO disallowed the said claim by treating the same as capital in nature. The Ld CIT(A) deleted the same after giving a finding that they represent routing repair expenses. The revenue is aggrieved. 16. The Ld D.R supported the order passed by the AO and the Ld A.R supported the order passed by the Ld CIT(A). 17. We notice that the Ld CIT(A) has examined the details of repair expenses on test check basis and has given a clear finding that they represent routine repair expenses incurred by the assessee. Before us, the revenue could not produce any material to contradict the finding given by Ld CIT(A). Hence, we do not have any other option but to confirm the order passed by Ld CIT(A) on this issue. 18. The last issue contested by the revenue relates to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested a sum of ₹ 2586.00 lacs in its subsidiary company named M/s. Digital Securities Pvt. Ltd. Even that investment has been brought forward from the earlier year. The assessee had held investments in the form of units in mutual funds, and during the year under consideration, all of them have been liquidated. Accordingly, the Ld A.R submitted that the assessee did not incur any expenditure in respect of the investments, and hence no disallowance is called for u/s 14A of the Act. He also submitted that the own funds available with the assessee is more than the amount of investments and hence no disallowance interest expenditure is called for. In any case, the disallowance of 5% confirmed by the Ld CIT(A) would meet the requirements of Sec. 14A of the Act. 23. We have heard the rival contentions on this issue and perused the record as submitted by the Ld A.R. We noticed that the assessee did not make any fresh investments during the year under consideration. A major portion of the investment has been made in the subsidiary company. During the year under consideration, assessee has liquidated the investments made in the units. Further the assessee is having own funds to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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