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2013 (8) TMI 139 - AT - Income TaxNon-deduction of TDS u/s 194C - franchise fees paid by the assessee to the Licensee - CIT(A) deleted the addition - Held that:- As decided in assessee's own in [2012 (4) TMI 440 - DELHI HIGH COURT] it is held that the tenor and purport of the terms of the agreement were that it was not a case where the licensee was doing any work for the assessee even within the wider meaning of the term “any work” as defined in Section 194C - In favour of assessee. Disallowance u/s 14A read with Rule 8D - CIT(A) partly deleted the addition - Held that:- CIT(A) has sustained the disallowance just by an estimate based at the rate of 5% without looking into whether the expenditure which has been disallowed has a proximate relationship with the income which has been earned by the assessee not forming part of total income. Therefore, set aside the order of the CIT(A) and restore taback to the file of AO with a direction to re-decide after giving the finding with all the expenditure whether have a proximate relationship with the income earned by the assessee on the shares and than accordingly he should estimate the disallowance - in favour of revenue for statistical purposes. Bonus paid to directors - disallowance u/s 36(1)(ii) - CIT(A) deleted the addition - Held that:- As decided in assessee's own case [2010 (12) TMI 746 - ITAT, Delhi] wherein held that as one of the directors would have received the bonus as dividend in case bonus was not paid. Otherwise, the bonus has been paid as per resolution of the Board of Directors. Therefore, the provision contained in section 36(1)(ii) is not applicable - Decided in favor of assessee. Addition on a/c of non-refundable portion of advance fee - CIT(A) deleted the addition - Held that:- As decided in assessee's own case [2010 (12) TMI 746 - ITAT, Delhi] only that part of the receipt is taxable in this year which accrued to the assessee as income. Decided in favor of assessee. Addition on a/c of bad debts - CIT(A) deleted the addition - Held that:- As decided in TRF Ltd. Vs. CIT [2010 (2) TMI 211 - SUPREME COURT] w.e.f. 01.04.1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact has become irrecoverable. It is enough of the bad debt is written off as irrecoverable in the accounts of the assessee. In favor of assessee. Addition on a/c of processing charges - CIT(A) deleted the addition - Held that:- As decided in India Cement Ltd. Vs. CIT [1965 (12) TMI 22 - SUPREME Court] such expenses are clearly allowable under section 36(1)(iii). In favor of assessee. Addition on a/c of advance written-off - CIT(A) deleted the addition - Held that:- The assessee has written off the advance given to the employees, when the employees left the employment as the amount no more could be recovered from the employee. CIT(A) although deleted the disallowance u/s 36(1)(vii), but section 36(1)(vii) is not applicable, but this will be a loss incidentally to the business of the assessee as the advance was given during the course of business. In favor of assessee. Disallowance of 4/5 of the advertisement expenditure - Held that:- the expenditure on publicity and advertisement has to be treated as revenue in nature which is allowable fully in the year in which it has been incurred. The expenditure was incurred to facilitate the appellant's trading operations. No fixed capital was created by this expenditure and there was no advantage which accrued to the appellant in the capital nature. Once the assessee claims the deduction for whole amount of such expenditure, even in the year in which it is incurred, and the expenditure fulfills the tests laid down u/s 37 and it has to be allowed. Only in exceptional cases of the nature of expenses as mentioned in Madras Industrial Investment Corporation Ltd. (1997 (4) TMI 5 - SUPREME Court), the expenditure can be allowed to be spread over, that too when the assessee chooses to do so. The same ratio has been laid down in the case of CIT vs. CITI Financial Consumer Finance Ltd [2011 (3) TMI 622 - Delhi High Court]. In favor of assessee.
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