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2023 (5) TMI 574 - ITAT KOLKATAExpenditure incurred by the assessee towards Club subscription fees and Club services - adjustment made by the CPC u/s 143(1)(a) - Centralized Processing Centre (CPC) has treated that the alleged expenses are personal in nature as the auditor has indicated for the disallowance of such expenditure - HELD THAT:- The details furnished by the auditor in the 3CD report about subscription and club services is a mere information and such type of expenditure may have some personal element but whether expenditure of any personal nature is included in such expenses can be examined only after verification of the bills and vouchers. Such observation of the auditor is similar to the observations made for the payment to the relatives under section 40A(2)(b) which cannot lead to disallowance of all expenses but only if the case of the assessee is scrutinized and such expenditure incurred for which payment has been made to relatives has to be examined by the ld. Assessing Officer as to whether such expenses are excessive or unreasonable having regard to the fair market value of the goods services or facilities, then such excess expenditure claimed by the assessee may be disallowed. Thus for the information regarding subscription and club services prima facie no adjustment was possible under the provisions of section 143(1)(a)(iv) of the Act and the CPC has exceeded its jurisdiction for making alleged disallowances. Going into the merits of the case as to whether of personal in nature was involved in the alleged amount of subscription and club services is not required to be dealt at this stage since the CPC has gone beyond the power provided in section 143(1)(a) of the Act for making the alleged disallowance. Decided in favour of assessee.
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