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2023 (4) TMI 84 - AT - Income TaxDisallowance of administrative expenses - 20% of Other Administrative Expenses was disallowed and added to the total income since the assessee did not furnish the supporting details like bills/vouchers during the course of assessment proceedings - HELD THAT - Since personal element involved in these expenses cannot be denied the AO disallowed 20% of the expenses claimed under the head Other Administrative Expenses . On perusal of the orders of authorities below we find that both the AO as well as CIT(A) has not doubted about incurring of administrative expenses. Disallowance of 10% of these expenses would relevant and to meet the ends of natural justice. Accordingly we sustain the disallowance under the head Other Administrative Expenses only to the extent of 10% of the total expenses claimed by the assessee. Disallowance of prior period depreciation claimed - HELD THAT - After considering the submissions of the assessee and as per the principle laid down in the case of M/s. Tipco Industries Ltd. 2012 (8) TMI 996 - ITAT MUMBAI wherein it was held that the expenditure relating to one year cannot be claimed in any other year the ld. CIT(A) dismissed the ground raised by the assessee. The depreciation has to be claimed in the year under consideration only and thus we find no reason to interfere with order passed by the ld. CIT(A) on this issue. Accordingly the ground raised by the assessee is dismissed. Disallowance of excess depreciation claimed on Robotix Kits - assessee has claimed depreciation on Robotix kits @ 60% - Rate was reduced to 15% by the AO in the assessment order citing the ITAT 2018 (9) TMI 2116 - ITAT CHENNAI order dated 12.09.2018 in assessee s own case - CIT(A) confirmed the disallowance made by the AO - HELD THAT - By following the above decision of the Tribunal AO has reduced the claim of depreciation on Robotix kits @ 15% which was rightly confirmed by the ld. CIT(A). We find no infirmity in the order passed by the ld. CIT(A) on this issue. The case law relied on by the ld. Counsel for the assessee in the case of Financial Software and Systems Private Limited 2019 (6) TMI 1454 - ITAT CHENNAI has no application to the facts of the present case for the reason that the computer or software attached is used for operation of robotix kits and therefore it cannot be construed as if the robotix kits itself is a computer. Thus the ground raised by the assessee is dismissed.
Issues:
1. Disallowance of administrative expenses 2. Disallowance of depreciation 3. Disallowance of excess depreciation on Robotix Kits Issue 1: Disallowance of Administrative Expenses The appellant contested the disallowance of various expenses under 'Administrative Expenses' by the Commissioner of Income Tax (Appeals) (CIT (A)). The Assessing Officer disallowed 20% of the expenses due to lack of supporting details like bills/vouchers. The CIT (A) upheld the disallowance after considering submissions and objections. The Tribunal found that while personal elements in the expenses were acknowledged, a 10% disallowance sufficed for natural justice. Thus, the disallowance under 'Other Administrative Expenses' was upheld to the extent of 10%. Issue 2: Disallowance of Depreciation The appellant challenged the disallowance of prior period depreciation claimed. The Assessing Officer disallowed the claim due to lack of substantiating details. The CIT (A) dismissed the appeal citing the principle that depreciation must be claimed in the relevant year only. The Tribunal upheld the CIT (A)'s decision, stating that the claim for depreciation should align with the year under consideration, leading to the dismissal of the appellant's appeal on this issue. Issue 3: Disallowance of Excess Depreciation on Robotix Kits The appellant contested the disallowance of excess depreciation claimed on Robotix Kits. The Assessing Officer reduced the claimed depreciation rate from 60% to 15% based on a previous ITAT order. The CIT (A) upheld the disallowance. The Tribunal considered arguments regarding the nature of Robotix Kits and their eligibility for higher depreciation rates. Relying on a previous Tribunal decision, it concluded that the kits were not equivalent to computers, thus justifying the 15% depreciation rate. The Tribunal dismissed the appeal on this issue, affirming the CIT (A)'s decision. In conclusion, the Tribunal partially allowed the appeal, upholding the disallowances of administrative expenses and excess depreciation on Robotix Kits while dismissing the appeal regarding the disallowance of prior period depreciation. The judgment emphasized the importance of providing supporting details for expenses and aligning depreciation claims with the relevant assessment year.
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