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2018 (12) TMI 1820 - AT - Income TaxNature of expenses - Expenditure on account of Sponsorship Rights - revenue or capital expenditure - as per assessee 10% of the fees were attributed towards participation and promotional activities by the team members and accordingly 50% of 90% of the revenue has been offered during the year and remaining 10% has been offered on pro-rata basis over the term of respective Sponsorship Right Agreement and the same has been offered for tax accordingly - HELD THAT:- CIT- A observed that the methodology adopted is followed by the assessee is difficult to understand as the same is neither as per accounting standard nor as per any specified criteria, once the Sponsorship Right Agreement have been signed for particular supporting event, the amount received is already determined, therefore, the assessee on his own should have offered 50% of such income, if 100% is not offered within the taxing year. However, the assessee has adopted its own methodology by dividing the income into two parts. However, the ld. CIT(A) directed the Assessing Officer that if the amount is taxed in Assessment Year 2011-12, same should be deleted to avoid the double taxation. We have seen that ld. CIT(A) has given reasonable direction to the Assessing Officer, if the assessee has offered remaining receipt in subsequent Assessment Year then to reduce such income from assessee’s total income assessed for Assessment Year 2011-12. In our view, the direction given by ld. CIT(A) is quite reasonable and which does not require any interference. Addition on account of Annual consideration paid to BCCI - HELD THAT:- As in 2009-10 in assessee’s own case [2018 (1) TMI 786 - ITAT MUMBAI] Tribunal is of the considered view that the payment of the Franchise fee for IPL Season-1 by the assessee can safely be held to be in the nature of a revenue expenditure, which was rightly claimed by the assessee as such while computing its income for the year under consideration - thus Franchise fee paid by the assessee to BCCI is a revenue expenditure. Feasibility study expense - Allowable business expenses or not? - AO allowed only 1/5th of the expenses - HELD THAT:- There is no dispute that lower authorities have not disputed the cost of the expenses. We have noted that the lower authorities have failed to specify as to how the case of assessee is covered under section 35D, when no new stadium was made was assessee. The assessee has incurred the preliminary expenses for feasibility expenses. It is an undisputed fact that ultimately the assessee abundant the idea of construction of new Stadium. As neither the scheme nor the idea of assessee was materialized or no new unit/ stadium was made, therefore, the assessee is entitled for deduction of entire expenditure incurred on such feasibility report as revenue expenditure Similar view was express by Hon’ble Delhi High Court in CIT Vs Priya Village Roadshaw [2009 (8) TMI 765 - DELHI HIGH COURT] - Decided in favour of assessee. Stamp duty expenses - Revenue or capital expenditure - HELD THAT:- We have noted that the stamp duty was paid by the assessee-company for the purpose of registration of new shareholder which cannot be treated as capital expenditure. Therefore, we direct the Assessing Officer to delete the disallowances. Adhoc disallowance of airfare expense, travelling expense and vehicle hire charges - HELD THAT:- As in 2009-10 in assessee’s own case [2018 (1) TMI 786 - ITAT MUMBAI] grounds of appeal is also restored to the file of assessing officer with the similar directions to verify the documentary evidences and grant appropriate relief to the assessee in accordance with law. Needless to direct that before passing the order the assessing officer shall grant opportunity of hearing to the assessee. The contention of the ld. AR for the assessee that the assessee has placed sufficient evidences on record and appropriate relief be allowed to the assessee. We are not inclined to accept such prayer of assessee, let all the evidence be examined by the assessing officer in accordance with law. In the result these grounds of appeal are allowed for statistical purpose. Disallowance of Lodging and Boarding and Food and Nutrition - HELD THAT:- As in 2009-10 in assessee’s own case [2018 (1) TMI 786 - ITAT MUMBAI] n the backdrop of the observations of the CIT(A) that either the assessee had failed to relate the aforesaid bills pertaining to hosting of dinners, tea parties etc., with the purpose for which the same had been incurred, or the same suffered from certain discrepancies as regards the amounts mentioned therein in comparison to those stated by the assessee during the course of the proceedings and had not been reconciled, therefore, in all fairness restore the matter to the file of the A.O for verifying as to whether the aforesaid bills,pertained to expenses incurred by the assessee in the course of its business, or not. We may however clarify that the A.O shall while readjudicating the aforesaid issue keep in view our aforesaid observations. We thus in the backdrop of our aforesaid observations restore the matter to the file of the A.O for carrying out necessary verifications. Claim of the deduction of franchise fee /consideration - Admission of additional ground - HELD THAT:- We have noted that the assessee has raised this ground of appeal on the basis of decision of Tribunal for assessment year 2009-10. The assessee has raised this ground of appeal for the first time before the Tribunal; therefore, the additional ground of appeal is admitted and is restored to the file of assessing officer to decide the same in accordance with law. Needless to order that before passing the order the assessing officer shall grant the opportunity to the assessee to explain and substantiate its contention on the issue. In the result the additional ground of result is allowed for statistical purpose.
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