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2020 (7) TMI 518 - AT - Income TaxNature of expenditure - Payment of ‘Franchisee fee’ - whether capital or revenue in nature? - HELD THAT:- The Tribunal vide order [2018 (12) TMI 1820 - ITAT MUMBAI] by placing reliance on the earlier order of the Tribunal for AY 2009-10 [2018 (1) TMI 786 - ITAT MUMBAI] decided the issue in favour of the assessee holding ‘Franchisee Fee’ as revenue expenditure. The facts in the assessment year under appeal are identical. The ‘Franchisee Fee’ has been paid in pursuance to agreement dated 04/04/2008, which has been examined by the Tribunal in the very first year of assessment. No contrary material has been placed on record by the revenue. Thus, respectfully following the decision of Co-ordinate Bench, we hold ‘Franchisee Fee’ paid by the assessee is revenue in nature. Adhoc disallowance of air fare and travelling expenditure - AO held that the expenditure includes travelling expenditure incurred for VIPs and Celebrities and, hence, not allowable u/s 37(1) - contention of the assessee is that the expenditure is necessary for the business, as VIPs and Celebrities are invited to attract more crowd and add glamour to the sporting event - HELD THAT:- As decided in own case [2018 (1) TMI 786 - ITAT MUMBAI] keeping in view the fact that as observed by the CIT(A) that the assessee had failed to place before him any evidence e.g air tickets, details of vehicles, name of service providers, details of persons utilizing these services and their nexus with business etc, therefore, as per him the possibility of the expenditure partly having been incurred for non business purposes could not be ruled out, and the fact that the assessee too had submitted before us that sufficient opportunity was not allowed to it at the time when such adhoc disallowance of expenses was made, therefore, in all fairness restore the matter to the file of the A.O for making necessary verifications on the basis of documentary evidence as regards the entitlement of the assessee towards the claim of the aforesaid expenses. A.O shall in the backdrop of our aforesaid observations make necessary verifications as regards the aforesaid claim of expense of the assessee booked under the said respective heads, viz. airfare expenses, travelling expenses and vehicle hiring charges. Adhoc disallowance of expenditure relating to Boarding and Lodging and Food and Nutrition - HELD THAT:- The Tribunal relying on the decision for 2009-10 in assessee’s own case [2018 (1) TMI 786 - ITAT MUMBAI]restored the issue to AO for fresh adjudication. Since the facts in the impugned assessment year are identical, we deem it appropriate to restore this issue back to the file of Assessing Officer with similar directions. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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