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TMI Blog2016 (7) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... to the query raised by Assessing Officer submitted that the aforesaid sum amount is the share of newspaper advertisement borne by All India PTU Department Associates and TDS has been deducted by them at their level which is confirmed from the letter issued by All India PTU-DEP Associates, copy was filed. The Assessing Officer, however, did not accept contention of the assessee because as per provisions of Section 194C, the person making the payment on account of advertisement shall at the time of credit of such sum to the account of the contractor or at the time of payment thereof, shall deduct the tax at the source @ 1% under section 194C of the Income Tax Act. The Assessing Officer did not accept contention of the assessee that TDS has been deducted by All India PTU Association and accordingly, disallowed the amount of Rs. 10,56,169/- for non-deduction of TDS. 4. The assessee reiterated the submissions before ld. CIT(Appeals). It was submitted that there are seven parties in Punjab doing similar type of business. The said parties formed an Association in the name of PTU-DEP Associates. It deals with the common matters including inter-alia making of arrangement of advertisement a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 in which the identical issue was raised in the appeal of the assessee on ground No. 1 (PB-89). The submissions of the assessee were identical as have been raised in the present appeal. The Tribunal in the absence of material on record, restored the matter back to the file of ld. CIT(Appeals) for deciding the issue afresh. 6(i) The ld. counsel for the assessee referred to PB-56 which is order of ld. CIT(Appeals), Patiala dated 18.09.2015 for assessment year 2008-09 of M/s Vaishno Maa Computers passed in view of the directions of the ITAT Chandigarh Bench and an identical issue was considered by ld. CIT(Appeals) in the light of material on record and ld. CIT(Appeals) held that the relationship between All India PTU-DEP Association and the assessee firm is not of contractor and contractee but is of association and members. The payments made by the assessee firm to the association are actually in the nature of reimbursement out of assessee's share of common advertisement incurred by the association, therefore, assessee is not liable to deduct TDS and appeal of the assessee was accordingly allowed. It, therefore, appears that the ld. CIT(Appeals) has not considered these details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y time, therefore, addition is unjustified. The ld. CIT(Appeals) did not accept contention of the assessee and dismissed this ground of appeal of the assessee. 9. After considering rival submissions, I am of the view addition is wholly unjustified. The assessee is proprietor of Chandigarh Computer Centre and in the assessment year under appeal, has capital of Rs. 14,51,117/-. The net profit in the year under consideration comes to Rs. 6,90,288/-, thus, total capital of assessee comes to Rs. 21,41,405/-. Further, assessee has interest free unsecured loan of Rs. 5 lacs from Shri Joginder Singh. These amounts/funds are sufficient to cover up the interest free advances given to the family members in a sum of Rs. 14,25,000/-. Hon'ble Punjab & Haryana High Court in the case of Kapson Associates 38 ITR 204 held that " when assessee having sufficient interest free advances to cover interest free advances, no disallowance under section 36(1)(iii) could be made". Following the above judgement and considering facts of the case, I set aside the orders of authorities below and delete the addition of Rs. 1,07,600/-. This ground of appeal of the assessee is allowed. 10. On ground No.3, asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Full Bench of Hon'ble Punjab & Haryana High Court in the case of CIT V Groz Beckert Asia Ltd. 351 ITR 196 held as under : "If an item of expenditure is to be considered capital in nature, the expenditure should bring into existence an asset or an advantage for the enduring benefit of a trade. Membership fee paid to a club does not bring into existence an asset or an advantage for the enduring benefit of the business. It is an expenditure incurred for the period of membership and is not long lasting. By scribing to the membership of a club, no capital asset is created or comes into existence. By such membership, a privilege to use facilities of a club alone, are conferred on the assessee and that too for a limited period. Such expenses are for running the business with a view to produce the benefits to assessee. Consequently, it cannot be treated as capital asset. Held accordingly, dismissing the appeal, that the corporate membership to the golf club was for a limited period of five years. It was obtained for running the business with a view to produce profit. Thus, the corporate membership fee paid to the golf club was of revenue expenditure." 13. PB-89 is order of ITAT C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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