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2017 (4) TMI 567 - AT - Income TaxDisallowance on account of club expenses and the expenditure to advertisement - Held that:- No distinguishable material has been produced before us to which it can be assumed that the finding of the CIT(A) is wrong against law and facts. The assessee is an advocate and claiming the club expenses in view of his profession. The advocate is being restricted for advertising in view of the regulation of BAR Council of India and such type of expenditure has been hit by Explanation to Section 37(1) of the Act. No plausible explanation has been given before us to justify the claim of the assessee. In view of the said circumstances, we are of the view that the CIT(A) has passed the order judiciously and correctly on these issues which nowhere require interference at this appellate stage. Therefore, these issues are decided in favour of the revenue against the assessee. Disallowance of Portfolio Management fee - Held that:- It is not in dispute that in connection with the present matter of controversy there are two views which have been taken by the Hon’ble Income Tax Appellate Tribunal. One is in favour of the assessee and the other is against the assessee. In view of the above mentioned case i.e. Serum International Ltd. Vs. Addl CIT and vice versa (2015 (6) TMI 794 - ITAT PUNE) the view which is in favour of the assessee is liable to be taken wherein held 'PMS' fees paid by the assessee is an allowable deduction from the capital gains. The finding of the said case is based upon the finding of Hon’ble Supreme Court of India in case [CIT Vs. Vegetable Products (1973 (1) TMI 1 - SUPREME Court)]. In view of the said circumstances we set aside the finding of the CIT(A) on this issue and Assessing Officer is directed to allow the appropriate relief of the assessee in terms of the above said decisions in accordance with law. Accordingly, these issues are decided in favour of the assessee against the revenue. Application of section 14A(2) read with Rule 8D - Held that:- In case titled as Godrej & Boyce Mfg. Co.[2010 (8) TMI 77 - BOMBAY HIGH COURT] Bombay High Court, it is specifically held that Rule 8D is not retrospective and it applied for the period w.e.f.2008-09 and disallowance has to be worked out on reasonable basis u/s.14A of the Act. However, at the time of argument, the learned representative of the assessee took the plea that he received the Long Term Capital Gain directly through broker and did not expend anything nor received Long Term Capital Gain from Kotak PMS, therefore when no expenditure was incurred by the assessee, therefore the same is not liable to be added. Since the matter is being ordered to be set aside and remanded to the Assessing Officer, therefore, we are of the view that this issue is required to be re-examined by the Assessing Officer after giving an opportunity of being heard to the assessee in accordance with law Penalty u/s 271(1)(c) - Held that:- There is lot of ambiguity to levy the penalty as initiated by the Assessing Officer in his order. Two different views have been taken by both the authority. Moreover, while deciding the appeal on merit in the instant case, the claim of the assessee was allowed and in the said circumstances when the quantum has been deleted then no penalty is sustainable in the eyes of law. Therefore, in the said circumstances the finding of the CIT(A) is not sustainable in the eyes of law. Therefore, we delete the penalty. Accordingly, the appeal of the assessee is hereby allowed.
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