TMI Blog2016 (4) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... ined and it is an allowable expenditure as held by the HON’BLE HIGH COURT OF KERALA in the case of CIT vs. APPOLLO TYRES LTD [1998 (8) TMI 68 - KERALA High Court] and disallowance thereon confirmed by the CIT-A is not justified - ITA No. 1769/Kol/2011 - - - Dated:- 15-4-2016 - Shri P. M. Jagtap, A.M. And Shri S. S. Viswanethra Ravi, J.M. For the Petitioner : Shri A.K.Tulsiyan, FCA For the Respondent : Shri Uday Kumar Sardar, Addl. CIT, Sr.DR ORDER Per Shri S.S.Viswanethra Ravi, J.M. This is an appeal filed by the assessee against the order dated 16.09.2011 passed by the CIT(Appeals)-XIX, Kolkata for the assessment year 2008-09 framed under section 143(3) of the I.T.Act. 2. The grounds raised by the assessee are placed as below: 1. That the Ld. CIT(A) erred in holding that the capital gain arising out of the sale of leasehold land and building thereon is STCG in place of LTCG in terms of Section 50 of the Income Tax Act, 1961. The said asset has never been a business asset. A wrong claim of depreciation over the same in the last year can not change the nature of asset. The profit out of the sale of said asset need to be treated as LTCG with benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the assessee had received consideration of ₹ 1,25,00,000/- or that the stamp valuation authority had assessed the value at ₹ 1,25,00,000/-. It is further contended by the assessee that in the course of assessment proceedings, it was found by the AO that the assessee had deposited ₹ 5 lakh on 28/4/2007 on account of Receivable Against Termination of Lease and has erroneously considered this amount to be a part of consideration money received by the appellant against the Deed of Surrender of Lease dt. 29/2/2008. It was submitted by the assessee that addition of ₹ 51akh to the total consideration of ₹ 1,20,00,000/- as per the Deed is completely arbitrary and erroneous because the aforesaid sum of ₹ 5 lakh which was received and deposited in bank on 28/4/2007 was actually, receied by the assessee in respect of termination of lease in immediately preceding F.Y. i.e., F.Y. 2006-07, and such sum appears in Receivable Against Termination of Lease A/c. as on 1/4/2007. In view of above, it was pleaded by the assessee that the addition of ₹ 5 lakh made by the AO in full value of consideration deserves to be deleted. 5.1 It was further subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared by the appellant. On the other hand, during the course of appellate proceedings it is contended by the Ld. A.R. that the AO was not justified in taking full value of consideration for surrender of lease rights at ₹ 1,25,00,000/- because, the sum of ₹ 5 lakh was receivable as on 31/3/2007 which was received by the appellant in F.Y. 2007-08 and deposited the same in his bank account. It is also contended by the appellant that as per the deed of surrender of least right, the full value of consideration was ₹ 1,20,00,000/- only and not ₹ 1,25,00,000/-. On careful consideration of the facts I find no substance in the submission of the appellant, because he himself has admitted that sum of ₹ 5 lakh deposited in Union Bank of India was on account of amount receivable against termination of lease. However, he has failed to explain that if the said amount of ₹ 5 lakh was not related to the surrender of lease of land and building, then, on account of which termination of lease that sum of ₹ 5 lakh was received by him. He has further failed to explain as to whether the said sum of ₹ 5 lakh was offered for taxation in the preceding financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the assessee has himself claimed the depreciation which has been duly allowed by the AO. Thus, the provisions of section 50 of the Act, then, are clearly applicable in the case of assessee and the profit arises from the sale of land and building is chargeable to tax as STCG as rightly held by the authorities below. We therefore, find no merit in the ground no.1 and dismiss the same. 9. Ground no.2 raised by the assessee is regarding the disallowance of ₹ 83,550/- on account of foreign travel. The AO disallowed at 60% of ₹ 1,39,249/-. The ld. CIT(A) was of the view that the foreign travel expenses on Ms. Roquia Farooque was purely in personal capacity, accordingly, CIT(A) confirmed the disallowance made by the AO. 10. Before us, ld. AR submitted that the assessee is a lady and requires personal assistance at that age and relied on a case law of Hon ble High Court of Kerala. The ld. DR submitted that the assessee did not produce any kind of evidence regarding the foreign travel expenses are non-personal and relied on the orders of both the lower authorities. 11. Heard both the sides and perused the material available on record. As relied by the HON BLE HIGH CO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court of Kerala that whether the expenditure incurred on foreign tour of the wife of the director is incurred for purposes of business or not. The Hon ble High Court considered the decisions rendered by the Gujarat High Court in Bombay Mineral Supply Co. Pvt. Ltd. vs. CIT (1985) 153 ITR 437 (Guj) and of the Madras High Court in CIT vs. T.S. Hajee Moosa Co. (1985) 153 ITR 422 (Mad), but, the Hon,ble Kerala High Court held that the ratio laid down by the Madras and Gujarat High Courts does not apply to the case on hand and applied the finding given by the Bombay Special Bench in GLAXO LABORATORIES (INDIA) LTD. vs. INCOME TAX OFFICER. 13. Let us examine the finding of the Bombay Special Bench in GLAXO LABORATORIES (INDIA) LTD. vs. ITO reported in 18 ITD 0226 (SB), the facts are that Chairman and the Chief Executive of Glaxo Holding had extended invitation to Mr. Mrs. Bhoothalingam and that the wife was accompanying her husband as a number of social engagements were included in the programme, The Special Bench also considered the ratio laid down by the Madras and Gujarat High Courts and observed that the facts of the case on hand and facts in the afore said decisions are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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