TMI Blog2015 (12) TMI 1761X X X X Extracts X X X X X X X X Extracts X X X X ..... and allowed 25% of the amount claimed - Held that:- The impugned amount was paid as a protection fee and was not a payment which was necessary for running the business, as is in the present case. The assessee could not run the business without making these payments on quarterly basis and, therefore, by no stretch of reasoning this could be held as capital in nature. The issue is no more res integra in view of the decision of Hon'ble Delhi High Court in the case of Fascel Ltd.(2008 (12) TMI 743 - DELHI HIGH COURT) - revenue appeal dismissed. - ITA no. 4722/Del/2013 - - - Dated:- 30-12-2015 - SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI A.T. VARKEY: JUDICIAL MEMBER Appellant by : Sh. P. Pardiwala Sr. Adv. Shri Deepak Chopra Adv., Ms. Nena Singh Adv. Respondent by : Shri Nihor Ranjan Pandey Add. CIT (DR) ORDER S.V. Mehrotra, Accountant Member This appeal has been preferred by the assessee against the order dated 13.5.2013 passed by the CIT(A)-19, New Delhi pertaining to AY 2008-09. Following grounds of appeal have been raised: 2. Brief facts of the case are that the assessee company was engaged in the business of providing cellular mobile telephony ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on scheme launched by the company for specific period - 'this represents the amount paid to the dealers by cross check. 5. Further, the assessee was required to furnish the confirmation of the commission payments made to the top 25 parties, which was also filed before the AO. The assessee also submitted that since its books of a/c had duly been audited by the auditors and in their report they have not given any adverse comments, therefore, in the absence of any evidence, additions/disallowances were totally uncalled for. The AO, however, disallowed 10% of the commission expenses, inter alia, observing as under: The reply of the assessee has been duly considered. The onus for proving the genuineness of a claim of expenditure lies on the assessee. This is more so, in view of the findings given in the assessment of preceding years where the commission expense has been disallowed. However, considering the fact that this year, assessee has filed confirmation letters and other details like Form 16As and taking a holistic view of the situation and considering all the facts discussed above, 10% of the commission expenses amounting to INR 6,24,87,988 (10% of INR 62,48,79,875) ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th of the amount spent and disallowed the balance amount. The AO has further observed as under: However, a deduction amounting to INR 4,59,96,303 is allowed in respect of amounts similarly treated as capital expenditure in earlier years [Net Addition of INR (4,50,79,123/-)] . 11. Ld. CIT(A) deleted the disallowance after taking note of various decisions of Hon'ble Delhi High Court in para 7.3 as under: 7.3 The appellant has relied on several judicial decisions including the following: (i) CIT v. Citi Financial Consumer Fin. Ltd. [2012] 335 ITR 29 (Delhi) Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment years 2001-02 and 2002-03 - Expenditure on publicity and advertisement is to be treated as revenue in nature allowable fully in year in which it is incurred [In favour of assessee] (ii) CIT v. Salora International Ltd. [2009] 308 ITR 199 (Delhi) Advertisement expenditure for launching products is revenue expenditure (iii) CIT v. Pepsico India Holdings (P.) Ltd. [2012] 207 Taxman 5 (Mag.) (Delhi) Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessee incurred certain expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment of Assam, for the purpose of carrying on the manufacture of cement, a lease of certain limestone quarries for a period of twenty years for certain half-yearly rents and royalties. In addition to the rents and royalties the appellant agreed to pay the lessor annually a sum of ₹ 5,000 during the whole period of the lease as a protection fee and 'in consideration of that payment the lessor undertook not to grant to any person any lease, permit or prospecting licence for limestone in a group of quarries without a condition that no limestone should be used for the manufacture of cement. The appellant also agreed to pay ₹ 35,000 annually for five years as a further protection fee and the lessor in consideration of that payment gave a similar undertaking in respect of the whole district. The question was whether in computing the profits of the appellant the sums of ₹ 5,000 and ₹ 35,000 paid to the lessor by the appellant could be deducted under section 10(2)(xv) of the Indian Income-tax Act, 1922. The Income-tax authorities, the Appellate Tribunal and High Court on a reference under section 66(1) held that the amount was not an allowable deduction under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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