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TMI Blog2012 (5) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of business, at the rate of 20% against 50%, as applicable during the relevant period. 2. The learned Commissioner of Income-tax (Appeals) erred in upholding the ad hoc disallowance of ₹ 5 lacs out of foreign travelling expenses, without pinpointing any specific instance and when all the details were submitted before both the lower authorities. 2. Brief facts relevant for adjudication of grounds No.1 2 are that the assessee is a company engaged in the business of manufacturing harness testers and measuring instruments. From the perusal of the Schedule of fixed assets forming part of the balancesheet, the Assessing Officer observed that the assessee has claimed depreciation at the rate of 50% i.e. ₹ 1,85,508/- o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assessee. 4. In the first appeal before the CIT(A), the assessee reiterated the same argument and contended that the different meaning given to the term commercial vehicle by the Assessing Officer cannot be taken into account as the definition of new commercial vehicle itself has been given in the Appendix-I of Depreciation Chart of Income Tax Rules. 5. The learned CIT(A) too rejected the contention of the assessee on the ground that business of the appellant is manufacturing of hardness testers and measuring instruments and not for hiring of vehicle, and, therefore, depreciation on these vehicles is @20% instead of 50%. He, accordingly, confirmed the findings of the Assessing Officer on this score. 6. Learned AR a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is acquired on or after 1st day of April, 2001 but before 1st day of April, 2002 or put to use on or after 1st day of April, 2002 for the purpose of business, the rate of depreciation is 50%. The definition of commercial vehicle has been given in Note 6 of the Appendix I, which defines Commercial Vehicle as under :- 6. Commercial vehicle means heavy goods vehicle , heavy passenger motor vehicle , light motor vehicle , medium goods vehicle , and medium passenger motor vehicle but does not include maxi-cab , motor-cab, tractor and road-roller . The expressions heavy goods vehicle , heavy passenger motor vehicle , light motor vehicle , medium goods vehicle , medium passenger motor vehicle , maxi-cab , motor-cab , t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight motor vehicle. 8.2 Similar issue has been considered by the ITAT Mumbai Bench in the case of Shah Rukh Khan (supra), wherein the same analysis has been considered by the ITAT and came to the following conclusion :- 4.3 We have perused the records and considered the rival contentions carefully. Dispute is regarding the rate of depreciation on the BMW car purchased by the assessee. The clause (1A) of part III of Appendix-I prescribes depreciation @20% in case of motor cars other than those used in a business of running them at hire. In case of motor buses, motor lorries and motor taxies used in a business of running them on hire, the depreciation has been provided at a higher rate of 40% as per clause 2(ii) of part III. However, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying the claim of the assessee for higher rate of depreciation cannot be sustained and the same is set aside and the claim of the assessee is allowed. Thus, respectfully following the aforesaid judgment, we direct the Assessing Officer to allow the depreciation @ 50%. Accordingly, the ground of appeal No.1 as raised by the assessee is allowed. 9. In ground No.2, the assessee has challenged the disallowance of ₹ 5,00,000/- out of foreign travelling expenses. The Assessing Officer has disallowed the expenses on the ground that details of foreign travelling expenses along with the documentary evidences to prove that the directors have visited particular parties abroad, has not been furnished by the assessee. Thus, out of total cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of ₹ 5,00,000/- is treated as personal or non-business expenditure. 10. The CIT(A) too confirmed the findings of the Assessing Officer on the same reasoning that complete details with evidences before the Assessing Officer could not be filed. 11. Learned AR on behalf of the assessee submitted that the assessee-company has substantial exports sales and for that purpose, the directors of the company have to undergo foreign travelling to expand the export business of the assessee. He also pointed out that turn over of the company in this year has increased from ₹ 7,36,00,000/- to more than ₹ 9,00,00,000/-. He further submitted that the details of travelling expenses have filed before the Assessing Officer as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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