TMI Blog2012 (10) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... g violation is allowed - in favour of assessee. Disallowance of Telephone expenses for personal usage - Held that:- It is clear from the facts of the case that the telephone was installed at the residence of the director and its personal use cannot be denied the disallowance of 20% is very reasonable disallowance which is based upon the facts and circumstances of the case - against assessee. Disallowance of business promotion expenses - Held that:- The facts of the case that assessee was generally engaged in trading of shares on its own account and had spent an amount of Rs.1,10,615/- as business promotion expenses, keeping in view the facts of the case, the disallowance of 20% is reasonable especially keeping in view the fact that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses for personal usage. iii) Disallowance of Rs.22,123/- out of business promotion expenses on ad hoc basis. 2. The Ld CIT(A) has grossly erred on the facts of the case and in law in upholding the disallowance of the house tax paid amounting to Rs.2,21,014/- in spite of it being allowable as per proviso to section 23(1) of the Income Tax Act, 1961 . 3. The appellant seeks leave to add or to amend the foregoing grounds of appeal, if it becomes necessary to do so in the interest of justice. 2. The brief facts of the case are that the assessee company is share broker and is a Member of National Stock Exchange (NSE) and as per assessment order dated 22.3.2006 the assessee is mostly dealing on its own behalf and has a small c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disallowance of Rs.2,21,014/- was upheld because the tax was paid after the property on which tax was levied has been sold out. 5. Dissatisfied with the order of Ld CIT(A), the assessee filed appeal before this Tribunal. 6. At the outset, the Ld AR took us to page 13 14 of paper book wherein the details of penalty imposed by NSE from the year 1998-99 to 2007-08 was placed. The Ld AR argued that in all these years similar type of penalties were imposed by NSE and in all these years these were allowed as expenses. He further highlighted that actually these were not in the form of penalties for violation of any law but were imposed for violation of certain norms and procedures with respect to daily margin etc. He also took us to page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, he argued that payment of municipal tax was an allowable expenditure for the purpose of calculation of income from house property. 7. The Ld DR, on the other hand, argued that assessee was engaged in the business of sale and purchase of shares and there was contravention of law for which the assessee was penalized and therefore the disallowance of penalty was justified. Reliance was placed in the case of Raj Woollen Industries v. CIT 43 ITR 36. He further argued that no log book was maintained and there was no bifurcation for personal expenses and business expenses and disallowance was a very reasonable disallowance. Similar argument was advanced for disallowance of part of business promotion expenses. The Ld DR submitted that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the disallowance of 20% is very reasonable disallowance which is based upon the facts and circumstances of the case. The case law relied upon by Ld AR does not specify whether in that case the telephone was installed at the residence of director or not. In the present case, it is clear from the facts of the case that the telephone was installed at the residence of the director and its personal use cannot be denied. In respect of third disallowance with respect to business promotion, we find from the facts of the case that assessee was generally engaged in trading of shares on its own account and had spent an amount of Rs.1,10,615/- as business promotion expenses, keeping in view the facts of the case, the disallowance of 20% is rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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