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2014 (9) TMI 162 - AT - Income TaxExpenses treated as Non-business expenses – Expenses incurred through credit card and in ordinary course of business – Held that:- Assessee has failed to produce any evidence to establish that the expenditure incurred under various heads of expenditure was relatable to the business of the assessee and in the absence of any evidence being filed by the assessee to prove its stand – the order of the CIT(A) is upheld – Decided against Assessee. Applicability of provisions of TDS - Disallowance u/s 40(a)(ia) – Held that:- The first aspect of the issue of non-deduction of tax at source was the payments to doctors, faculty, in respect of advertisement, contractor and professional as referred to by the AO - assessee during course of hearing had furnished on record tabulated period-wise chart in respect of the payments to doctors and faculty, payments on account of advertisement, contactor and professionals along with evidence of deposit of tax at source - The complete payments on which tax was deducted by the assessee from time to time was deposited before the due date of filing of the return of income – relying upon CIT Vs. Rajinder Kumar [2013 (7) TMI 454 - DELHI HIGH COURT] - in view of the amended provisions of the Act, the expenditure on which the tax was due to be deducted and the same was deducted and deposited before the due date of filing of return, is to be allowed as an expenditure in the hands of the assessee - The second set of the disallowance was the items on which tax was not deducted at source - the payments were made to the franchises and not the employee directly and in the absence of any satisfactory explanation with regard to the nature of such payments booked under the head incentive and because of failure to deduct the tax at source, the amount is not allowable in the hands of the assessee – Decided partly in favour of assessee. Amount paid to ROC for increasing Authorised capital disallowed – Held that:- The expenditure having been incurred in the capital field is the capital expenditure in the hands of the assessee and is not allowable as revenue expenditure in the hands of the assessee – following the decision in Brook Bond India Ltd. Vs. CIT [1997 (2) TMI 11 - SUPREME Court] - Expenditure incurred by a company in connection with issue of shares is directly related to the expansion of the capital base of the company, and is capital expenditure, even though it may incidentally help in the business of the company and in the profit making – Decided against assessee. Payments made to the imprest account disallowed u/s 40A(3) – Held that:- Payments made to the imprest account do not attract the provisions of section 40A(3) of the Act - if any expenditure is booked in cash over and above ₹ 20,000/-, then the provisions of section 40A(3) of the Act are to be applied and disallowance are to be worked out thereunder - the assessee claimed that the imprest account was available with the directors from time to time and only remuneration at the end of the year was adjusted and hence no cash payment for the said expenditure of remuneration to the Directors - the stand of the assessee needs to be verified – thus, the matter is to be remitted back to the AO for verification – Decided in favour of Assessee. Employees contribution towards PF account u/s 36(l)(va) – Payment made before due date of filling of return – Held that:- Following the decision in CIT Vs. Nuchem Ltd. [2010 (2) TMI 959 - PUNJAB AND HARYANA HIGH COURT] - and in case the employees contribution toward PF account is paid before filing of the return, then no disallowance is warranted - The AO is directed to verify the claim of the assessee and recompute the disallowance, if any - Decided in favour of Assessee. Estimated addition of commission paid to doctors – Held that:- The statement of the employee of the assessee was recorded in the presence of the learned counsel for the assessee and was also signed by him - the disallowance on account of commission paid to the doctors for referring the patients to the hospital are to be added as income in the hands of the assessee in view of the provisions of section 69C of the Act – the amount of addition is restricted – Decided partly in favour of Assessee.
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