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2014 (1) TMI 541 - ITAT AHMEDABADDisallowance towards petrol and diesel expenses – Relevant vouchers could not be produced - Held that:- The Assessing Officer had asked the assessee to produce one month vouchers in the case of travel business but the assessee failed to produce the before the Assessing Officer - The assessee did not produce the copies of the vouchers for his perusal - the CIT (Appeals) did not call for a remand report from the Assessing Officer before granting partial relief - Thus, one more opportunity be granted to the assessee to substantiate its claim by producing the vouchers and other details before the Assessing Officer - the issue remit back to the file of the Assessing Officer and direct the Assessing Officer to verify the details and decide the issue on merits with respect to disallowance – Decided in favour of Assessee. Disallowance towards business promotion and advertising expenses – No supporting material present – Held that:- The disallowance has been made by the Assessing Officer on estimated basis at 25 per cent. of the expenses and which has been restricted to 10 per cent. for the reason that the assessee has paid fringe benefit tax - the assessee has neither produced any supporting material either before the lower authorities or before the tribunal – there was no reason to interfere with the order of the Commissioner of Income-tax (Appeals) – Decided against Assessee. Disallowance on account of bad debts u/s 36 (1)(vii) of the Act – Held that:- Assessee has written off the amounts in the books of account pertaining to its travel business and the income was taken into consideration while computing the income in the earlier years - the debts were written off in the books of account and therefore it has complied with the requirement of the Act - the assessee has written off the amount in its books of accounts – Following T.R.F. Ltd. v. CIT [2010 (2) TMI 211 - SUPREME COURT] - the addition made by the Assessing Officer to be deleted – Decided in favour of assessee. Disallowance of depreciation on goodwill u/s 32(1)(2) of the Act – Restricting the disallowance to 10 per cent. as against 20 per cent - Held that:- The assessee had taken an additional ground with respect to claim of depreciation on goodwill before the Commissioner of Income-tax (Appeals) and the it was dismissed by the Commissioner of Income-tax (Appeals) for the reason that the goodwill did not form part of intangible asset specified in section 32(1)(2) of the Act - there is nothing on record to indicate as to what was the amount of goodwill on which the assessee has claimed depreciation – Following CIT v. Smifs Securities Ltd. 2012 (8) TMI 713 - SUPREME COURT] - goodwill is an asset within the meaning of section 32 and is therefore eligible for depreciation – matter remitted back to the AO for fresh adjudication – Decided in favour of Assessee and against the Revenue. Deletion of disallowance towards maintenance of building and machinery – Held that:- The nature of the expenses is that they appear to have been incurred towards maintenance of building and machinery - the Assessing Officer while holding them capital in nature has not brought on record that they have resulted into bringing a new asset with the appellant - He has also not brought on record any material to show that it has resulted in enhancement of existing capacity of the appellant – Relying upon CIT v. Pioneer Engineering Syndicate [1988 (2) TMI 15 - MADRAS High Court] and CIT v. Jafarbhai Akbarali and Bros. [1992 (1) TMI 17 - BOMBAY High Court] - if an expenditure was incurred for acquiring and bringing into existence an asset for an enduring benefit of the business, it would normally be capital expenditure and if the expenditure was made for running the day-to-day business with a view to produce more income it would be "revenue expenditure" - Nothing has been brought by the Revenue to controvert the findings of the Commissioner of Income-tax (Appeals) – there was no reason to interfere in the order – Decided against Revenue.
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