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2014 (11) TMI 476 - AT - Income TaxElectricity expenses disallowed – Held that:- CIT(A) is rightly of the view that the electricity charges debited to the profit and loss account for the year is only ₹ 8,19,537/-, including the sum of ₹ 6,73,947 - the electricity charges debited to the P&L account of the financial year under consideration included the amount which was related to the arrears of the earlier years - the claim of the assessee cannot be said to be comprised of contingent liability and the CIT(A) rightly deleted the disallowance and addition – the order of the CIT(A) is upheld – Decided against revenue. Legal and professional expenses disallowed – Held that:- The AO has not disputed the fact that the assessee obtained premises situated at F-89/24, Okhla Phase I on lease from M/s Superex Steel Products Pvt. Ltd. who was recorded owner of the premises - when the immoveable property/premises belonged to a particular person or entity and the same is leased and handed over to another person or entity, then in case of any dispute pertaining to the electricity payment raised, the dispute would be titled in the name of the owner of the property/premises - it cannot be said that the expenses incurred by the assessee on legal and professional charges paid to Shri K.C. Mittal were not pertaining to the assessee firm - the legal and professional charges paid by the assessee in the case before Hon'ble Delhi High Court which was titled in the name of recorded owner of the premises are certainly the expenditure wholly and exclusively for the purpose of the business of the assessee which is allowable u/s 37 of the Act – the order of the CIT(A) is upheld – Decided against revenue. Mobile expenses disallowed – Held that:- The AO has not disputed the fact that fringe benefit tax has been paid by the assessee firm on telephone expenses - The AO has not also disputed the fact that the partners of the assessee firm have to operate the business of the assessee with overseas clients and customers who reside in different time zones around the world - the explanation of the assessee is acceptable that the residential telephones as well as mobile phones of the partners were largely used for international calls and internet - the CIT(A) rightly granted relief for the assessee – Decided against revenue. Mutual funds disallowed – Held that:- As per copies of the mutual fund statement in the name of the assessee for the period, it is clear that the earning of dividend which were directly credited to the assessee's bank account are receipts in the nature of dividend from mutual funds which are eligible for exemption u/s 10(35) of the Act - the CIT(A) rightly granted relief for the assessee and we are unable to see any justified reason to interfere with the order in this regard – Decided against revenue.
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