TMI Blog2015 (9) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions, the provision of Section 40(a)(ia) cannot be invoked and Revenue can initiate proceedings u/s.201 for short fall in deduction of tax at source. - Decided in favour of assessee. Disallowance u/s 43B - whether CIT(A) erred in allowing the claim regarding notified area tax liability paid as per provisions of section 43B without considering the fact that any expense in connection with closed business is not an allowable deduction u/s. 43B - Held that:- The only ground on which the disallowance of the payment of tax was made was the presumption of the Assessing Officer that the business was closed. After the order of CIT(A), there remains no dispute that the business was not closed but such business was leased out by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 24,88,000/- - Decided in favour of assessee. - ITA. No. 1472/Ahd/2011, ITA. No. 1473/Ahd/2011 - - - Dated:- 26-8-2015 - SHRI G. D. AGRAWAL AND SHRI S. S. GODARA, JJ. For The Revenue : Shri Dinesh Singh, Sr. D.R. For The Assessee : Shri M. R. Patel, A.R ORDER PER G.D. AGRAWAL, VICE PRESIDENT These cross appeals by Revenue and assessee are directed against the order of learned CIT(Appeals)-IV, Baroda, dated 01/04/2011 for A.Y. 2007-08. ITA No. 1472/Ahd/2011 (Revenue s appeal) 2. The ground no.1 of the Revenue s appeal reads as under: 1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in allowing the claim of ₹ 29,90,467/- disallowed u/s.40(a)(ia) of the Act ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.40(a)(ia). The Tribunal held that where tax has been deducted by assessee, though under the wrong provisions, the provision of Section 40(a)(ia) cannot be invoked and Revenue can initiate proceedings u/s.201 for short fall in deduction of tax at source. On appeal, the Hon ble Calcutta High Court upheld the order of CIT(A). We find that facts in the case under appeal are identical. No contrary decision is brought to our knowledge. We, therefore, respectfully following the above decision of Hon ble Calcutta High Court uphold the order of CIT(A) on this point and rejected the ground nos. 1 2 of Revenue s appeal. 6. Ground no.3 of the Revenue s appeal reads as under: 3. On the facts and in the circumstances of the case and in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Concised ground nos.1 2 of the assessee s appeal read as under: 1. That, on facts and in law, the learned CIT(A) has grievously erred in confirming the disallowance of Egypt tour expenses of ₹ 24,88,000/- 2. Alternatively, and without prejudice to above ground of appeal, the entire expense of Egypt tour be directed to the allowed in subsequent assessment year 2008-09. 10. At the time of hearing before us, it is submitted by the learned counsel that during the year under consideration, the assessee had arranged a Sales Promotion Scheme for its clients, sub-commission agents and Engineers etc. As per such Scheme, the persons who achieved the target were entitled to Egypt tour. That on the basis of performance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 11. We have carefully considered the arguments of both sides and perused the material placed before us. The relevant facts as recorded by Assessing Officer in the order read as under: 3.2 In response the assessee vide its letter dated 8.12.2009 has furnished the justification mainly in the form of comparative statement of sales promotion branch wise. On perusal of sales promotion of V.V. Nagar, it was found that it has gone to ₹ 26,90,730/- compared to last year's figure of ₹ 1,86,961. It was further explained that the assessee has arranged one tour to Egypt for its valued clients, sub commission agents, and engineers and due to which the sale promotion expenses of all the branches taken together has increased fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the willingness and availability of the persons are known, unless the trip duration is known, unless the Trip Organiser gives the estimate. So, the amount estimated and provided was nothing but merely a contingent liability and the same cannot be allowed. Penalty proceeding under section 271(l)(c) is initiated separately as the assessee has furnished inaccurate particulars of its income by claiming a liability which has not accrued and crystallized during the year. From the above, it is evident that the Assessing Officer has not doubted that tour was to be arranged by assessee as a part of Sales Promotion expenses. He disallowed the expenses mainly on the ground that there was no basis for the provision and the tour was actually con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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