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TMI Blog2013 (6) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenditure to the tune of Rs. 30,34,000/- claimed by the assessee on account of diminution in the value of the shares of M/s. Flexcel International Pvt. Ltd. 3. Facts at the time of the assessment proceeding show that while scrutinizing the profit and loss account, the Assessing Officer observed that the assessee has claimed an amount of Rs. 30,34,000/- on account of diminution in value of investment. The assessee was asked to explain why the diminution in value of investment should not be disallowed. In response to which, the assessee vide letter dt. 16.11.2007 explained as under: "The assessee has made a strategic investment in the business of M/s. Flexcel International Pvt. Ltd. at a cost of Rs. 54,28,500/-. Thus unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital expense and accordingly disallowed the sum of Rs. 30,34,000/-. 5. The assessee carried the matter before the Ld. CIT(A) but without any success. The Ld. CIT(A) held that the loss in the diminution in value of shares is nothing but notional capital. Loss not allowable as Revenue expenditure and confirmed the addition made by the AO. 6. Aggrieved by this finding of Ld. CIT(A), assessee is before us. 7. The Ld. Counsel for the assessee reiterated that the assessee has suffered a loss as the value of the shares have been eroded by Rs. 30,34,000/- and this loss was out of the investment made by the assessee in the business of M/s. Flexcel International Pvt. Ltd. The investment was made to the tune of Rs. 54,28,500/-. The Ld. Counsel arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. 10. Ground No. 4 to 7 relates to addition of Rs. 9,31,890/- on the basis of TDS certificate. 11. During the course of the scrutiny assessment proceedings, the AO found that the assessee has claimed TDS from two companies namely Kotak Mahindra Bank Ltd and HDFC Bank Ltd. The AO observed that there is some discrepancy in the figure of sales shown in TDS certificate and the sale amount shown in the details of sales filed by the assessee. The AO sought clarification from the assessee to which the assessee replied as under: "The difference in sale as shown in the Profit & Loss account and as per the TDS certificates is mainly due to the payments made by HDFC Bank and other customers in the subsequent year and also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see vehemently argued that the entire additions have been made without appreciating the facts of the case. It is the say of the Counsel that the assessee has shown the sale figure in the assessment year 2004-05 and it is only the TDS amount which has been claimed during the year as the TDS certificates have been received during the year. The Ld. Counsel further stated that if at all the Revenue authorities are not convinced, they should have declined to give credit for the TDS but cannot make the addition. To support his submission, the Ld. Counsel submitted a statement of TDS reconciliation and copy of account of Kotak Mahindra Bank Ltd., and HDFC Bank Ltd. 15. The ld. Departmental Representative relied upon the orders of the lower author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Fringe Benefit tax. 20. Briefly stated the facts of the case are that during the course of the assessment proceedings of the return of fringe benefit for the year under consideration, the Assessing Officer noticed that the assessee has debited an amount of Rs. 14,07,375/- on account of flood relief expenses. The assessee was asked to explain why the same should not be considered for the FBT. The assessee explained that the amount has been incurred as reimbursement to staff who suffered heavily during the floods in Mumbai. The AO was of the opinion that the assessee has incurred flood relief expenses for the Employees Welfare and not considered for the purpose of FBT. Applying the provisions of Sec. 115WC(1), the AO worked out the FBT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the legislative intent for bringing FBT in statute, in our considerate view, the expenditure incurred by the assessee cannot be termed as expenditure on staff welfare inviting the deeming provision of FBT. The expenditure incurred by the assessee is a one-time affair and is not in the nature of recurring expenditure and therefore cannot be said to be out of consideration for employment. Therefore, we do not find any merit in levying FBT on such expenditure. Findings of the lower authorities are vacated. The AO is directed not to levy FBT on this expenditure of Rs. 14,07,375/-
27. In the result, the appeal filed in ITA No. 7830/M/2010 is allowed.
Order pronounced in the open court on 18.1.2013 X X X X Extracts X X X X X X X X Extracts X X X X
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