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2020 (5) TMI 280 - AT - Income TaxDisallowance of business promotion expenses - assessee is incurred these expenses for promotion of its business - assessee incurred major expenses which consist of corporate membership of Mumbai Cricket Association, on social functions and donation - HELD THAT:- Hon’ble jurisdictional High Court in Otis Elevator [1991 (4) TMI 53 - BOMBAY HIGH COURT] held that when the assessee incurred expenses for promotion of club fees with a view to enable the assessee to improve its relation and prospects, the payment must be allowed as business expenditure. The other expenses, genuineness of which were not disputed by the lower authorities which mainly consist of either donation to various charitable organizations, distribution of Notebook to poor student and expenses incurred during the festival season for erecting hoarding are also allowable expenses. Considering the nature and expenses, AO is directed to allow all the expenses and delete the disallowance accordingly. In the result, Ground No.A of the appeal is allowed. Disallowance of interest u/s 40A(2)(a) - HELD THAT:- Neither the AO has brought on record that the interest paid by the assessee is on higher side as compared to the market rate for getting the unsecured loan for such business as undertaken by assessee. Nor the AO has recorded that assessee made the payment to its sister concern for evasion of tax. We have noted that on similar rate of interest, the addition was deleted in assessee’s group case in Puspanjali Realtors [2018 (1) TMI 1588 - ITAT MUMBAI] and on appeal before the ITAT, the order of ld. CIT(A) was confirmed. In view of the above discussion, and respectfully following the order of the coordinate bench in Puspanjali Realtors Pvt. Ltd. In the ground of appeal raised by the assessee is allowed.
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