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TMI Blog2020 (6) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed-off by way of this common order for the sake of convenience and brevity. 1.2 The Ld. Authorized Representative, placed on record a chart in support of issues raised in the appeal. We have carefully heard the arguments advanced by both the representatives and perused relevant material on record. In the above background, the appeal for AY 2010-11 is taken up first. ITA No. 4213/Mum/2017, AY 2010-11 2.1 This appeal contests the order of Ld. Commissioner of Income Tax (Appeals)-24, Mumbai [CIT(A)], Appeal No. CIT(A)-22/DCIT-10(3)/IT- 266/13-14 ,dated 27/03/2017 on following grounds: - 1. Disallowance of the Prepaid Expenses: The learned CIT (A) erred in upholding the disallowance of prepaid expenses of Rs. 5,12,792 without appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeding paragraphs. 2.2 The assessee being resident corporate assessee stated to be engaged in the business of sale, servicing, erection & commissioning of construction equipment was assessed u/s. 143(3) on 20/12/2013 wherein the income of the assessee was determined at Rs. 1426.91 Lacs after certain additions / disallowances as against returned income of Rs. 1295.51 Lacs e-filed by assessee on 27/09/2010. 2.3 Disallowance of Prepaid Expenses: Upon perusal of financial statements, it transpired that the assessee reflected an amount of Rs. 5.12 Lacs as Prepaid Expenses in the Balance Sheet. The assessee submitted that the same would be transferred to respective expense account once it expires. However, not satisfied with assessee's submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specialists of the Liebherr group provided training to the assessee's employees on resolving the complications in the imported machines. Keeping in view the nature of expenses, we find that the action of Ld. AO in treating the said expenditure as capital expenditure was bereft of any merits. The expenditure was merely training expenditure to train the assessee's employeesqua new products. The assessee did not gained any benefit of enduring in nature. The said expenditure was rightly claimed as revenue expenditure. Ground No.2 stands allowed. 2.5 Depreciation: On verification of fixed assets schedule, an addition of Rs. 11.37 Lacs in office equipment was noted. It transpired that purchases amounting to Rs. 5.81 Lacs consisted of items suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 37(1). Not convinced with the arguments, this addition stand confirmed. The ground stands dismissed. 2.7 Capital Expenditure: Certain items under the head repair and maintenance expenditure claimed as revenue expenditure, were treated as capital expenditure and depreciation was allowed against the same. The details of the same has been tabulated in para-9 of the quantum assessment order. The expenditure was in the nature of networking & cable work in server room, electrical work for server room, networking cabling, furniture works and cost of blinds etc. The adjustment resulted into an addition of Rs. 6.84 Lacs. The stand of Ld.AO, upon confirmation by Ld. CIT(A), is under appeal before us. Going by the nature of expenditure, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of sales promotion expenses. Aggrieved, the assessee is under further appeal before us. Going by the adjudication in AY 2010-11, the travelling expense disallowance stand restricted to 10%. The nature of sales promotion expenses would show that these are in the nature of gifts, advertisement expenses, entertainment expenses, exhibition expenses, sales commission expense and sales promotion expenses. The substantial expenses are exhibition expenses, sales commission and sales promotion expenses. Keeping in view the nature of expenditure, we opine that estimation of 5% would meet the end of justice. Therefore, we reduce the disallowance to 5%. The appeal stands partly allowed. ITA No. 1856/Mum/2018, AY 2013-14 5. In the first ..... X X X X Extracts X X X X X X X X Extracts X X X X
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