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2013 (11) TMI 838 - AT - Income TaxDisallowance u/s 37(1) of the Income tax act - Disallowance of Rs. 2 lacs being 50% of Club Membership Fees treating as personal expenses - Assessee had debited Rs. 4 lacs as Club Membership fee in his books of accounts – Held that:- Judgment of Hon'ble Bombay High Court delivered in the case of Otis Elevator [1991 (4) TMI 53 - BOMBAY High Court] is distinguished from - In certain cases issue regarding membership of clubs has been decided, but all such cases are of corporate assessee unlike the present case where assessee is proprietor of a concern. FAA had endorsed the views of the AO that element of utilisation of facilities for himself and the family members could not be ruled out. But, neither AO nor FAA had found as what was the facilities provided by the Club and what facilities were availed by the assessee for himself or his family members during the year under consideration - So, in the interest of justice restored the issue back to the file of the AO for fresh adjudication. Disallowance in respect of Sundry Balance written off - Assessee had debited Rs. 4, 87, 189/- under the head Sundry Expenses – Contention of Revenue that amount in question was in nature of advance to suppliers, that no actual purchases were made – Held that:- Assessee had not routed the said transaction to P & L Account, that it had claimed that amount in question could not be recovered - He had given details of sundry debtors/creditors balance written to the AO - AO has not taken into consideration the submissions made by the assessee in this regard – Proper opportunity of being heard was not provided to the Assessee - In the interest of justice matter needs to be restored to the file of the AO for fresh adjudication. Disallowance u/s 40(a)(ia) of the Income tax act - Addition on account of non-deduction of TDS as per the provisions of section 194C(1) of the Act – Addition of Rs. 10. 44 lacs - Assessee had paid Rs. 10, 44, 010/- to contractor, and he did not deduct tax at source – Held that:- As per the provisions of the Act individuals and HUFs, who were subject to mandatory audit, had to deduct tax at sources from AY. 2003 -04. While introducing the amendment to section w. e. f. , 01. 06. 2002, if legislature in its wisdom did not include the individuals and HUFs, who had not to get their accounts audited u/s. 44AB of the Act, to deduct tax source than it was a case of reasonable classification. But, legal position was very clear that during the year under consideration proviso was very much applicable and the assessee had to deduct tax as his turn over exceeded the monetary limits prescribed by the provisions of section 44AB of the Act - FAA had rightly held that Proviso was applicable and assessee had to deduct tax source u/s. 194C of the Act for the payments made by him during the AY under consideration. - Decided against the assessee.
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