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Jagran Prakashan Ltd Versus DCIT, Range-6, Kanpur and Vica-Versa

2016 (4) TMI 869 - ITAT LUCKNOW

Disallowance of of "advertisement and circulation expenses" - Held that:- Assessing Officer has observed that in the course of checking of the claim, it transpires that significant portion of the claim incurred was incurred in cash and further instances were noticed where the expenses were apparently found to be not allowable. He has further noted that it was explained by the assessee that the expenditure claimed as mentioned here in before were incurred wholly for the business purpose but as pe .....

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ingle instance of the expenses which are personal in nature. Ld. CIT(A) has deleted the disallowance made by the Assessing Officer to the extent of ₹ 8.00 lakh out of ₹ 10.00 lakh but he confirmed the disallowance of ₹ 2.00 lakh on this basis that Assessing Officer has mentioned that some of the expenses claimed were found to be not allowable or were personal in nature. Ld. CIT(A) has also not pointed out even a single instance of expenses which is not allowable or which is per .....

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t ] supports the case of the assessee because it was held in this case that for the alleged personal use by Directors, expenditure cannot be disallowed in the hands of the assessee company although the claim may be added in the hands of the concerned Directors/ employees as perquisite. Respectfully following this judgment of the Hon’ble Gujarat High Court, we delete the disallowance

Disallowance in respect of insurance premium paid for mediclaim policy of the Directors - Held that:- T .....

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ndered in the case of Sayaji Iron and Engg. Co. Vs. CIT (Supra), this amount also cannot be disallowed in the hands of the assessee company although the same may be considered for taxation in the case of concerned Directors as per law and therefore, this disallowance is also deleted.

Disallowance of expenses incurred on education and training of Shri Rahul Gupta for his education of MBA course in UK - Held that:- After returning to India after completion of study abroad, Mr. Rahul Gu .....

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dent by Shri A.K. Singh,CIT,DR ORDER PER A. K. GARODIA, A.M. This is an assessee s appeal directed against the order of Ld. CIT (A)-II, Kanpur dated 26.02.2014 for the AY 2005-06. 2. The grounds raised by the assessee are as under: 1. BECAUSE the learned "CIT(A)-II" has erred in law and on facts in upholding the disallowance of ₹ 2 lacs out of adhoc disallowance of ₹ 10 lacs made by the Assessing Officer, out of "advertisement and circulation expenses". 2. BECAUSE .....

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llowing/upholding the disallowance of expenses claimed under the heads; (Rs.) i) Electricity expenses for the Directors residence ' 7,57,080 ii) Insurance premium paid for mediclaim policy of the Directors 1,62,591 on the ground that the same were in the nature of represented "personal expenditure of the directors incurred by the assessee" 4. BECAUSE the "appellant" had incurred the said expenditure as per terms of employment of the directors as approved by the Board of D .....

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im insurance policy on the life of directors constituted a legitimate business expenditure of the "appellant" in as much as such an expenditure provided a safeguard to it (the "appellant") and the CIT(A)-II has erred in law and on facts in upholding the said disallowance. 7. BECAUSE in any case the "appellant" being a body corporate there could not have been any "personal user"/ "personal expense" and the expenses referred to above, could not hav .....

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e authorities below is wholly erroneous. 10. BECAUSE the disallowance of ₹ 23,55,190/- is based on a wholly wrong premise and the same is not sustainable. 11. BECAUSE the order appealed against is contrary t>9 facts law and principles of natural justice. 3. Regarding Ground Nos. 1 and 2, Ld. AR of the assessee reiterated the same contentions, which were raised before the Ld. CIT(A). 4. Ld. DR of the Revenue supported the orders of authorities below. 5. We have considered the rival submi .....

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e of checking of the claim, it transpires that significant portion of the claim incurred was incurred in cash and further instances were noticed where the expenses were apparently found to be not allowable. He has further noted that it was explained by the assessee that the expenditure claimed as mentioned here in before were incurred wholly for the business purpose but as per the Assessing Officer, the submission of the assessee were not found convincing as very nature of the expenses mentioned .....

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Officer to the extent of ₹ 8.00 lakh out of ₹ 10.00 lakh but he confirmed the disallowance of ₹ 2.00 lakh on this basis that Assessing Officer has mentioned that some of the expenses claimed were found to be not allowable or were personal in nature. Ld. CIT(A) has also not pointed out even a single instance of expenses which is not allowable or which is personal in nature. Under these facts, in our considered opinion, adhoc disallowance confirmed by the Ld. CIT(A) is not justi .....

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in the case of Sayaji Iron and Engg. Co. Vs. CIT reported in 253 ITR 749 supports the case of the assessee because it was held in this case that for the alleged personal use by Directors, expenditure cannot be disallowed in the hands of the assessee company although the claim may be added in the hands of the concerned Directors/ employees as perquisite. Respectfully following this judgment of the Hon ble Gujarat High Court, we delete the disallowance of ₹ 7,57,080/-. 7. Regarding the disal .....

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company as per the terms of appointment of the Directors. Hence, as per this judgment of the Hon ble Gujarat High Court rendered in the case of Sayaji Iron and Engg. Co. Vs. CIT (Supra), this amount also cannot be disallowed in the hands of the assessee company although the same may be considered for taxation in the case of concerned Directors as per law and therefore, this disallowance of ₹ 1,62,591/- is also deleted. Accordingly, Ground Nos. 3 to 7 are allowed. 8. Regarding Ground Nos. 8 .....

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loid bilingual I-next in particular. But as per Para 14 of the assessment order, disallowance was made by the Assessing Officer on this basis that Shri Rahul Gupta is no way associated with the assessee company. Ld. AR of the assessee placed reliance on the judgment of the Hon ble Allahabad High Court in the case of CIT Vs. U.P. Asbestos Ltd. reported in 79 DTR 105 (Alld.) it was held by the Hon ble High Court in this case held that being a legal entity a company can take a decision to secure it .....

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the Hon ble Allahabad High Court. 9. Ld. DR of the Revenue supported the orders of the authorities below. 10. We have considered the rival submissions. We find that in the case of CIT Vs. U.P. Asbestos Ltd. (Supra), the issue involved was regarding expenditure incurred of education abroad of Mr. Priyank Tayal, son of the Managing Director in July, 2001. In that case, after coming back from USA , Mr. Tayal joined the company as Director on 23rd June, 2004. The assessment year involved in that cas .....

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