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DCIT, Circle-1 (2) , Ahmedabad Versus Shri Parthiv A Patel

2017 (2) TMI 335 - ITAT AHMEDABAD

Allowance of expenditure of direct and indirect nature - assessee is a cricketer receiving match fees/retainerships from various cricket bodies as declared under the head ‘income from business and profession’ - Held that:- Assessee clarifies that the assessing authority itself had verified correctness of the impugned expenses. The same however does not emanate from the assessment order. We further find that neither the Assessing Officer nor the CIT(A) has sought to establish a direct nexus betwe .....

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ffording adequate opportunity of hearing to the assessee so as to prove the above direct nexus. - Decided in favour of revenue for statistical purposes. - ITA Nos.140 & 141/Ahd/2016 - Dated:- 31-1-2017 - SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER For The Revenue : Shri Byomkesh Pandu, Sr. D.R. For Th Assessee : Shri Hemal Desai, A.R. ORDER PER S. S. GODARA, JUDICIAL MEMBER These two Revenue s appeals for assessment years 2009-10 & 2012-13 arise against the C .....

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377; 31,73,928/- pertaining to direct and indirect expenses in former assessment year and from ₹ 45,88,255/- to ₹ 45,16,589/- in latter assessment year; as made by the Assessing Officer. 3. We come to relevant facts now. This assessee derives income from playing cricket sport, sponsorship and marketing. He claimed various expenses under the head business development, office, salary, office rent, other interests, petrol expenses, repair/maintenance, telephone, travelling, vehicle, sta .....

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ss & profession . He sought to clarify that the expenditure in question was to over look his personal/professional aspect like conveyancing, legal matters, laisoning and physical fitness etc. in order to remain professionally fit to play the above cricket sport. The Assessing Officer declined to accept the same on the ground that since the assessee had been deriving match fee and retainerships from various cricket bodies, they did not involve any business or professional activity. He further .....

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r s action in both assessment years as indicated in Revenue s pleadings as under: 3. Decision:- Submissions made by the appellant have been considered with reference to the assessment order passed. Only effective ground of appeal is against the addition of ₹ 31,73,9287- made by the AO by disallowing various expenditure claimed by the appellant. The AO stated as under in the assessment order:- "The reply of assessee considered carefully and found the same is not acceptable. The assesse .....

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ity not any manufacturing activity nor any acquired any qualification from which it can be said that he is doing profession. Therefore he is also not deriving income from professional activities. Therefore it is very much clear that the expenditure claimed by the assessee is not attribute to any business or profession. In view of above the expenditure of ₹ 31,73,928/- claimed by the assessee as business expenditure is not an allowable expenditure. Accordingly amount of ₹ 31,73,928/- .....

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e of all the expenses made by the AO are not found justified. The appellant is a well known cricketer and returned income of ₹ 1,53,20,056/- for the year under consideration. To earn the said income, the appellant had to in incur some expenditure. Playing cricket is the profession of the appellant and TDS was also deducted considering the receipts of the appellant as professional receipts. The findings of the AO that expenditure is not allowable, is not logical for the simple reason that a .....

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4.63 BUSINESS DEVELOPMENT EXP 4,22,296.00 DEPRECIATION EXP 3,51,359.09 INSURANCE EXPENSES 17,727.00 LOAN PROCESSING CHARGES 5,183.00 Misc Exp 23,304.00 OFFICE EXPENSES 2 , 4 2 , 0 2 0 . 0 0 OFFICE RENT 1,08,000.00 OTHER INTEREST 2,05,733.77 PETROL EXP 2,80,106.48 REPAIR AND MAINTANANCE EXP 17,450.00 SALARY EXPENSES 8,46,718.00 STATIONARY EXP 10,248.00 TELEPHONE EXP 95,856.24 TRAVELLING EXP 5,13,717.48 VEHICLE EXP 80,422.00 Net Profit 1,56,44,289.01 Total 1,89,15,447.70 On going through the P/L a .....

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imed by the appellant are found genuine looking to his income returned for the year. However, about the indirect expenditure, out of the following expenditures, personal elements cannot be ruled out: (i) Petrol Expenses Rs.2,80,106 (ii) Repair & Maint. Exp Rs.17,450 (iii) Travelling Exp. Rs.5,13,717 Total Rs.8,11,273 As mentioned above, out of the total expenditure of ₹ 8,11,273/-, I consider 10% of the same i.e. ₹ 81,127/- as incurred for personal purposes and additions to that .....

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