By Jagdish D. Shah
Jagdish T. Punjabi
Chartered Accountants
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New Page 1
Part B :
Unreported
Decisions
(Full texts of the following Tribunal decisions are available at
the Society’s office on written request. For members desiring that the Society
mails a copy to them, Rs.30 per decision will be charged for photocopying and
postage.)
8 Radial Marketing Pvt. Ltd. v. ITO
ITAT ‘SMC’ Bench, Mumbai
Before R. K. Gupta (JM)
ITA No. 3868/Mum./2008
A.Y. : 2003-04. Decided on : 19-5-2009
Counsel for assessee/revenue : G. P. Mehta/K. K. Mahajan
S. 37(1) — Capital or revenue expenditure — Whether the
amount paid for handsets and for talk-time charges were capital in nature —
Held, No.
Facts :
During the year under appeal the assessee had claimed a sum
of Rs.24,500 paid for handsets and Rs.14,000 paid for talk-time charges as
revenue expenditure. However, the AO treated the same as capital expenditure and
allowed the depreciation.
Held :
The Tribunal referred to the CBDT Circular issued with
reference to the payments made under ‘Own Your Telephone’ scheme of MTNL. It
noted that as per the Circular the amount paid for the purchase of handsets was
allowable as revenue expenditure. In view thereof, it allowed the claim of the
assessee. As regards the amount paid for talk-time — it agreed with the assessee
that it cannot be treated as capital in nature as the same was not for any
capital assets.
Reference :
CBDT Circular No. 204/70/75-IT (All), dated 10-5-1976.
