TMI Blog2013 (8) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... ould estimate the disallowance - in favour of revenue for statistical purposes. Bonus paid to directors - disallowance u/s 36(1)(ii) - CIT(A) deleted the addition - Held that:- As decided in assessee's own case [2010 (12) TMI 746 - ITAT, Delhi] wherein held that as one of the directors would have received the bonus as dividend in case bonus was not paid. Otherwise, the bonus has been paid as per resolution of the Board of Directors. Therefore, the provision contained in section 36(1)(ii) is not applicable - Decided in favor of assessee. Addition on a/c of non-refundable portion of advance fee - CIT(A) deleted the addition - Held that:- As decided in assessee's own case [2010 (12) TMI 746 - ITAT, Delhi] only that part of the receipt is taxable in this year which accrued to the assessee as income. Decided in favor of assessee. Addition on a/c of bad debts - CIT(A) deleted the addition - Held that:- As decided in TRF Ltd. Vs. CIT [2010 (2) TMI 211 - SUPREME COURT] w.e.f. 01.04.1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact has become irrecoverable. It is enough of the bad debt is written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has erred on facts and in law in deleting addition of ₹ 14,80,66,894/- on a/c of non-deduction of TDS ignoring that the assessee failed to comply with the provisions of section 194C of the I. T. Act. 2. The Ld. CIT(A) has erred on facts and in law in restricting the disallowance u/s 14A read with Rule 8D to ₹ 1,16,604/- as against disallowance of ₹ 2,83,973/-. Ld. CIT(A) has failed to take cognizance of sub-section (3) of section 14A which specifies that even if the assessee makes a claim that no expenditure has been incurred in earning the excepted income, sub-section (2) of section 14A shall apply, meaning threby, disallowance u/s 14A(1) is called for. 3. The Ld. CIT(A) has erred on facts and in law in deleting addition of ₹ 8,m14,280/- made u/s 36(1)(ii) on account of disallowance of bonus paid to directors of the company ignoring that the provisions to section 36(1)(ii) of the I. T. Act, 1961 are clearly applicable in the assessee's case. 4. The Ld. CIT(A) has erred on facts and in law in deleting addition of ₹ 13,14,00,000/- on a/c of non-refundable portion of advance fee ignoring that as per the terms and condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 889/- on account of expenses. The assessing officer applied Rule 8D read with section 14A and disallowed a sum of ₹ 3,83,862/-. CIT(A) upheld the action of the assessing officer making the disallowance, but CIT(A) computed the disallowance at ₹ 1,16,604/- being 5% of the dividend income. 6. We heard the rival submissions and carefully considered the same, we noted that under section 14A(i) of the Income Tax Act, no deduction can be allowed to the assessee in respect of the expenditure incurred in relation to the income if income do not form part of the total income. Section 14A sub section 2, further states that whether the assessing officer having regard to the account of the assessee's previous year is not satisfied with the correctness of the claim that the claim of the expenditure made by the assessee or the claim made by the assessee that no expenditure has been incurred in relation to the income not forming part of the total income under the Act for such previous year, he shall determine the amount of the expenditure in relation to such income in accordance with such method as may be prescribed. In this regard Rule 8D has been prescribed but Rule 8D has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, dismiss this ground. 9. Ground No. 4 relates to the deletion of the addition of ₹ 13,14,00,000/- . The facts relates to this issue are that the assessee is engaged in the business of imparting coaching for various entrance examination. Some of the courses offered by the assessee are spread over two accounting periods. Thus, part of the fees when received is booked as advance fee in the accounting year in which the student is enrolled. The advance fee presents the fee pertaining to the period falling in the next accounting year when the education/coaching was actually imparted to the students. The assessing officer, however, added the aforesaid amount of fee booked as advance fee as income for the relevant assessment year. CIT(A) deleted the addition following the decision of the assessee's own case of this Tribunal in ITA No. 4924 and 4925/Del/2009 as per para 21 of its order before us. Even though, Ld. DR vehemently argued but we do not find any illegality or infirmity in the order of the CIT(A) and we are of the view that this issue is duly covered by the decision of this Tribunal and assessee's own case for the assessment year 2006-07. We accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady dismissed ground No. 3 in the assessment year 2007-08 in the precedent paragraph. Accordingly, this ground also stands dismissed. 17. Ground No. 3 relates to the deletion of the disallowances of the expenditure incurred on advertisement. 18. The facts relates to this grounds are that the assessing officer disallowed 4/5 of the advertisement expenditure as he was of the view that this expenditure was incurred by the assessee to create long-term enduring benefit in the form of intangible brand value. 19. When the matter went before the CIT(A), CIT(A) deleted the disallowances by holding as under. 7. I have carefully considered the submissions made by the Ld AR and have gone through the assessment order. The AO has su moto amortised the aforesaid advertisement expenses and have allowed 1/5th of it i.e. ₹ 1,05,61,343/- and have disallowed the balance of ₹ 4,22,45,372/- on the basis of decision of the Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd. It is seen that the expenditure in question has been incurred by the assessee in the relevant assessment year and a claim of deduction thereof has been made u/s 37 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture which is allowable fully in the year in which it has been incurred. The expenditure was incurred to facilitate the appellant's trading operations. No fixed capital was created by this expenditure and there was no advantage which accrued to the appellant in the capital nature. Once the assessee claims the deduction for whole amount of such expenditure, even in the year in which it is incurred, and the expenditure fulfills the tests laid down u/s 37 of the Act and it has to be allowed. Only in exceptional cases of the nature of expenses as mentioned in Madras Industrial Investment Corporation Ltd. (Supra), the expenditure can be allowed to be spread over, that too when the assessee chooses to do so. The same ratio has been laid down by the Hon'ble High Court of Delhi in the case of CIT vs. CITI Financial Consumer Finance Ltd. (2011-TIOL-368-HC-Del-IT). Further, it is also seen that in the earlier assessment year the assessment orders were passed u/s 143(3) and the assessee's claim of expenditure under the head advertisement. Hence, the principle of consistency demands that this expenditure should be allowed as revenue expenditure as held by the Hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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