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TMI Blog2017 (6) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... e hires cars owned by third parties and the assessee is not the owner of the cars. Therefore the aforesaid accessories which are required to render call taxi services cannot said to be items of capital expenditure. They are installed in the taxi owned by a third party. Therefore these items of expenses have to be regarded as revenue expenditure. We are of the view that the expenses in question cannot regarded to be as capital expenditure. Nevertheless allowability of expenses in question u/s 37(1) of the Act is also dependent on the condition that these expenses were incurred by the assessee for the purpose of business of the assessee. We therefore set aside the order of CIT(A) and remand the question to the AO for fresh consideration with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and deductible while computing income from business. According to the AO the assessee was requested to furnish details and evidence of incurring of miscellaneous expenses and justify the quantum of expenses with reference to the volume of business. According to the AO the assessee had not filed any evidence regarding incurring of expenses and also had not explained the justification of these expenses with reference to the volume of business of the assessee. In this regard the AO also observed that during the previous year the assessee had receipts only to the extent of ₹ 3,90,183/- from driver rental and recruitment receipts. The AO also noticed that in the books of accounts of the assesee only a sum of ₹ 7,40,692/- which was 1/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered. Assessment record was called for and verified. On verification of the assessment record it is seen that appellant has merely given various broad heads under which the expenditure was incurred. No other details of expenditure such as bills/vouchers or at least name, address and amount of payment made was furnished. From the broad heads given, it is seen that most of the heads of expenditure are in the nature of capital expenditure which was not allowable u/s 37 of the I.T Act Even otherwise the appellant has not discharged the onus cast upon him on the assessee to prove the expenditure claimed by it Reliance is placed on the decision of CIT vs. Modistone Ltd. 206 Taxman 123 (Delhi). In view of the above it is held that AO had correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the miscellaneous expenses had not been called for by the AO. The assessee in a letter dated 27.09.2006 has however furnished the details of the miscellaneous expenses and had also explained the accounting treatment in the books of accounts with regard to the miscellaneous expenses as follows :- "6. Details of Misc. expenses not written off or ₹ 29.S5.728/- and details of' Misc. expenses written off of ₹ 7.40,692/-. Only 1/5 th of' the total expenditure of ₹ 3 7,03,460/- were written off during the year as expenditure was of enduring nature. 11. Misc. expenses of ₹ 29.62.76S/- were not written off during the year because the benefit of these expenditure were to accrue in long term. However, since the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary for the assessee to have furnished the necessary evidence before the CIT(A). We are of the view that the expenses in question cannot regarded to be as capital expenditure. Nevertheless allowability of expenses in question u/s 37(1) of the Act is also dependent on the condition that these expenses were incurred by the assessee for the purpose of business of the assessee. We therefore set aside the order of CIT(A) and remand the question to the AO for fresh consideration with a liberty to the assessee to file evidence to show incurring of these expenses by the assessee. We may also add that the accounting treatment given by the assessee in the books of accounts will not be decisive in the matter. With these observations, we allow the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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