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TMI Blog2009 (1) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case, the learned CIT(A) erred in deleting the addition of ₹ 1,50,000 in respect of personal use of vehicles, keeping in view the judgment of Hon'ble Madras High Court in the case of CIT vs. Chitram Co. (P) Ltd. (1991) 91 CTR (Mad) 7: (1991) 191 ITR 96(Mad). 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in deleting the addition of ₹ 1,50,000 in respect of personal use of telephone, keeping in view the judgment of Hon'ble Madras High Court in the case of CIT vs. Madura Coats Ltd. (2003) 263 ITR 241(Mad). 3. Although tax involved is less than the limits laid down by the CBDT but appeal is filed because substantial questions of law of recurring nature are involved. 4. On the facts and in the circumstances of the case, the learned CIT(A) erred in deleting the addition of ₹ 1,51,606 in respect of acquiring of ISO certificate which resulted benefit of enduring nature to the assessee company. 4. On considering the total of the additions deleted by the CIT(A) which are challenged before the Tribunal in these grounds of appeal of the Revenue, we find that the total amount of additions/disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the grounds of assessee and this appeal filed by the Revenue involving tax effect of less than ₹ 2 lakhs being against the CBDT Instruction No. 2 of 2005, dt. 24th Oct., 2005 wherein it is mentioned that only the cases where the tax effect exceeds ₹ 2 lakhs, the appeals could be filed before the Tribunal. Hence this appeal of the Revenue is not maintainable and liable to be dismissed and we order accordingly. However, since we have heard this appeal on merits also, now we proceed to decide this appeal of the Revenue on merits. 6. The first two grounds of appeal of the Revenue pertains to assessee's claim of ₹ 18,27,580 under the head of vehicle running and maintenance of the head office and the claim of telephone expenses of ₹ 48,56,708 under the head telephone expenses. The AO made the ad hoc disallowance of ₹ 1,50,000 each in respect of vehicle running and maintenance expenses and telephone expenses claimed by the assessee. 7. On appeal the CIT(A) relying on the decisions in Sayaji Iron Engg. Co. vs. CIT (2002) 172 CTR (Guj) 339: (2002) 253 ITR 749(Guj); D.S. Construction (P) Ltd. vs. ITO (1987) 29 TTJ (Del) 22; Pritam Hotel (P) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the authorities to prove that motorcar expenses were partly for personal usage but the onus lay on the petitioner who claims that it was not used for personal usage. Before us, learned counsel for the assessee submitted that the issue whether in the case of a company any such disallowance, as involved in the instant case of the assessee, could be made, came up for consideration before the Gujarat High Court in the case of Sayaji Iron Engg. Co. vs. CIT (2002) 172 CTR (Guj) 339: (2002) 253 ITR 749(Guj) and the Tribunal in Dy. CIT vs. Haryana Oxygen Ltd. (2001) 73 TTJ (Del) 575: (2001) 76 ITD 32(Del); Perfect PAC Ltd. vs. IAC (1993) 46 TTJ (Del) 438 and Banco Products (India) Ltd. vs. Dy. CIT (1997) 59 TTJ (Ahd) 387: (1997) 63 ITD 370(Ahd) and the Tribunal consistently decided the issue in favour of the assessees and against the Revenue by holding that no such disallowance could be made in the case of companies. Learned Authorised Representative for the assessee further submitted that the CIT(A) was not justified in ignoring the decisions favouring the assessee in preference to the decision of Madras High Court (supra) without assigning any specific reasons. Learned Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s because in this case the disallowance was sustained by their Lordships under ss. 40A(5) and 40C of the IT Act which was relevant in asst. yr. 1980-81 but the same is no longer applicable to the facts and issue under consideration before us, more so because in the instant case the disallowances have been made under s. 37(1) of IT Act and not under ss. 40A(5) and 40C of IT Act. Hence the decision (supra) is of no assistance to the Revenue in the instant case. 9.3 Where as, we find that an identical issue on identical facts relating to claim of car expenses and telephone expenses incurred by the company has been decided by the Tribunal in the above cases (supra) in favour of assessee and against the Revenue relying on the decision of Gujarat High Court in the case of Sayaji Iron Engg. Co. (supra) hence the issue involved in ground Nos. 1 and 2 involved in the appeal of Revenue is decided against the Revenue and in favour of the assessee and consequent upon the same the orders of CIT(A) in this regard are upheld and ground Nos. 1 and 2 of the appeal of the Revenue are rejected. 10. Now we shall deal with ground No. 4 of the appeal of the Revenue relating to the issue of expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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