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TMI Blog2018 (1) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... al charges at Rs. 4,20,000/- and in determining the allowable expenditure at Rs. 50,000/- as against claim of Rs. 4,70,000/-. 3. That the Ld. CIT(A) is not justified in holding that the entire expenditure of Rs. 29,53,959/- under the head rates and taxes is not only capital but is penal in nature and not allowing the same either and / or u/s. 43B and 24 of the Income Tax Act, 1961 and sustaining the disallowance of the above said amount. 4. That the Ld. CIT(A) is not justified in confirming the disallowance of Rs. 4565/- out of employees contribution towards EPF and ESI under section 36(1)(va) of the Income Tax Act, 1961. 5. That the further grounds shall be submitted at the time of hearing. 3. The brief facts of the case are that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income of Rs. 2,64,02,406/- from the house property in the revised computation of income; the current year income was shown at Rs. 2,09,30,181/-. Thereafter, claiming set off of brought forward depreciation of Rs. 20,46,292/- against the current year income of Rs. 2,09,30,181/-, the net income in the revised computation was shown at Rs. 1,88,83,889/-. The case was picked up under scrutiny. Accordingly, the AO completed the assessment at an income of Rs. 2,62,64,130/- and made the various additions vide order dated 14.3.2014 passed u/s. 143(3) of the Act. Against the aforesaid assessment order, assessee appealed before the Ld. CIT(A)-XXVI, New Delhi, who vide his impugned order dated 28.08.2014 has partly allowed the appeal of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal. The relevant finding of the Tribunal read as under:- "8. In ground No. 3, the Revenue has challenged the deletion of disallowance of Rs. 3,00,000/- made by the AO u/s. 37(1) of the Act. In the assessment proceedings, the AO noticed that the assessee had paid a sum of Rs. 3,00,000/- to M/s. S.R. Kapoor & Company for appearing in block assessment proceedings. The AO observed that since no block assessment order was passed in the case of assessee firm, the expenses booked by the assessee might have related to the block assessment completed in the case of the partner or in the case of other concern of the group. He, therefore, disallowed the expenses u/s. 37(1) of the Act. The ld.CIT(A) allowed the claim of assessee stating that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in this regard in his books of account. Therefore, there appears no good reason to make payment of legal fee during the year for such work which stood completed 3-4 years before the payment of such fee. The appeal proceedings before the Tribunal or further appeal proceedings before the Higher Courts, to our mind, would not be covered by the narration given in the above bill. There is no agreement on record to indicate that the assessee may make such payments whenever he thinks fit. The assessee also did not explain whether any provision for payment of preceding years' expenses in subsequent years, was made in the books of account. It is also a thing of common practice that no consultant would leave its fee unpaid for such a long period af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is immaterial who makes the payment on behalf of the assessee. What is to be seen is that whether the payment relates to assessee or not and has been duly accounted for in the books of account. The ld.CIT(A) has also gone through the ledger account of rates and taxes in the assessee's books wherein Deepsons Departmental Stores was shown as creditor. The bills issued by MCD were also found in respect to the assessee's business premises. He further observed that the payments were made based on laws of the Government and in connection with the business. The bills or receipts of the payments nowhere show that the alleged payments were in the nature of penalty. He, therefore, deleted the disallowance." 6.2 After perusing the aforesaid findin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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