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2014 (11) TMI 439 - AT - Income TaxEntrance fees paid to club disallowed – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that an expenditure incurred on account of payment of membership entrance fee paid to the club is an allowable expenditure – Decided against revenue. Disallowance u/s 14A – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that The Tribunal has set aside the issue to the file of the AO for fresh adjudication - In this year, the CIT(A) has already given direction to the AO to work out the disallowance on some reasonable basis – thus, the order of the CIT(A) is upheld – Decided against revenue. Expenses on software charges disallowed – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that the Tribunal relied upon CIT v/s Raychen RPG Ltd. [2011 (7) TMI 953 - Bombay High Court] for coming to the conclusion that the expenditure incurred by the assessee on the software was in the nature of the revenue expenditure - if the expenditure incurred on software are to facilitate the assessee's business or enabling the management to conduct the business more efficiently or more profitably then it cannot be said to be in the nature of profit making and has to be treated as revenue expenditure - The expenditure incurred by the assessee on software was in the nature of revenue, hence, allowable as an expenditure – Decided against revenue. Allowability of Set off and brought forward loss of amalgamating company against LTCG – Whether the assessee company which is an amalgamated company should be allowed to set off and carry forward of the losses computed under the head "capital gains" which had arisen to the erstwhile amalgamating companies under the provisions of section 74 - Held that:- The loss under the head "capital gain" is allowable to an assessee alone - There is no mention about the situation and the condition under which such a loss is allowed to be set-off and carried forward in the case of amalgamation, that is, to allow loss or set off loss of one assessee which has merged with another assessee - section 74 cannot be read or interpreted so as to give benefit of set-off and carried forward of losses under the head capital gains in the case of amalgamation and demerger, sans any specific provision therein – Decided against assessee. Payments made to ex-managing directors disallowed – Expenses to be treated as unexplained or not - Held that:- The assessee in the explanation filed before CIT(A) has clearly explained the nature of expenditure and why such a payment has been made along with the approval and minutes of the AGM and the minutes of the board meeting - All the evidences have not been properly considered or appreciated by the CIT(A) – thus, the matter is required to be remitted back to the AO for examination of the details, nature of payment and the evidences – Decided in favour of assessee.
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