Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 665 - AT - Income TaxApplicability of Section 50C of the Income Tax Act, 1961 on depreciable assets - Dis-allowance under section 14A - Adhoc disallowance of vehicle expenses & miscellaneous expenses - Adhoc disallowance to cover the leakage of revenue - Held that:- We have carefully considered the rival submissions. On this aspect, we find that the said plea has been raised by the assessee before us, and it was not raised before the lower authorities. We deem it fit and proper to remand this aspect back to the file of the Assessing Officer, who shall examine the same in accordance with law. Needless to say, the Assessing Officer shall allow the assessee an opportunity of being heard before passing an order afresh on this aspect. Thus, on this aspect assessee partly succeeds for statistical purposes. The Grounds of Appeal Nos.2.1 to 2.3 raised by the assessee relate to a disallowance of ₹ 75,000/- sustained by the CIT(A) in terms of section 14A of the Act.On this aspect, it was a common ground between the parties that the similar disallowance retained by the CIT(A) in assessment year 2004-05 was not challenged by the Department before the Tribunal and therefore the said decision had become final. The Ld. Representative also pointed out that even assessee had not challenged the decision of the CIT(A) before the Tribunal for assessment year 2004-05 in sustaining the disallowance of ₹ 75,000/-.In view of the aforesaid factual matrix, we deem it fit and proper to affirm the order of the CIT(A) on this aspect and accordingly the Grounds of Appeal No.2.1 to 2.3 of the assessee and the cross-Ground raised by the Revenue in its appeal are dismissed. The CIT(A) has deleted a sum of ₹ 2,96,000/- and retained a disallowance of ₹ 3,00,000/- on an ad-hoc basis. In coming to such conclusion, the CIT(A) followed the order of his predecessor in the assessee’s own case for the assessment year 2004-05. At the time of hearing before us, it was submitted by the Ld. Representative that in assessment years 2003-04 and 2004-05, the Tribunal in assessee’s own case vide ITA Nos.1005/PN/2007 and 88/PN/2008 respectively dated 30.06.2011 has setaside the issue back to the file of the Assessing Officer for fresh verification. Following the aforesaid precedent, which is not disputed by the Ld. Departmental Representative, on this aspect we restore the matter back to the file of the Assessing Officer to decide it afresh. By way of Ground of Appeal No.4, assessee has challenged the order of the CIT(A) in confirming an ad-hoc disallowance of ₹ 10,57,860/- made out of miscellaneous expenses. At the time of hearing, the Ld. Representative for the assessee pointed out that similar issue came before the Tribunal in assessee’s own case for assessment years 2003-04 and 2004-05 wherein the Tribunal vide its order dated 30.06.2011 (supra) has set-aside the matter back to the file of the Assessing Officer for fresh verification. Following the aforesaid precedent, which continues to hold the field and has not been disputed by the Ld. Departmental Representative, we set-aside the impugned order of the CIT(A) and restore the matter back to the file of the Assessing Officer who shall decide the issue afresh. In Ground of Appeal No.5, issue raised by the assessee is with regard to a sum of ₹ 98,816/- which represented cost of club services disallowed by the lower authorities. On this aspect also, it was a common point between the parties that the said issue is covered by the decision of the Tribunal in the assessee’s own case for assessment year 2003-04 vide order dated 30.06.2011 (supra). The Tribunal vide para 14 of its order dated 30.06.2011 (supra) has allowed the claim of the assessee. Following the aforesaid precedent, we set-aside the order of the CIT(A) and direct the Assessing Officer to delete the addition of ₹ 98,816/- made out of cost of club services. Thus, on this aspect assessee succeeds. In the last Ground of Appeal, assessee has challenged the action of the CIT(A) in confirming an ad-hoc disallowance of ₹ 3,17,240/- being 0.2% of staff welfare expenses, sales promotion, advertisement expenses and traveling expenses to cover the leakage of revenue.It is quite evident that the disallowance in question is made in an ad-hoc manner and is based on mere surmises and conjectures. We therefore setaside the order of the CIT(A) and direct the Assessing Officer to delete the addition of ₹ 3,17,240/-. Thus, on this aspect assessee succeeds.
|