TMI Blog2015 (12) TMI 1830X X X X Extracts X X X X X X X X Extracts X X X X ..... easehold improvements expenditure - revenue or capital expenditure - HELD THAT:- As assessee has incurred the expenditure on lease hold premises and no asset has come into existence. Accordingly he directed the AO to allow the same as revenue expenditure. The Ld A.R submitted that an identical issue was considered by the Tribunal in the assessee s own case relating to AY 2004-05 [ 2012 (4) TMI 772 - BOMBAY HIGH COURT] and was decided in favour of the assessee. Consistent with the view taken therein, we uphold the order of Ld CIT(A) on this issue. Assessment of interest arising on Non Performing assets on accrual basis - HELD THAT:- As this issue is covered by the decision rendered by the Tribunal in the assessee s own case for AY 2004-05 [ 2012 (4) TMI 772 - BOMBAY HIGH COURT] wherein the Tribunal has decided this issue in favour of the assessee. He further submitted that the decision taken by the Tribunal was in accordance with the decision rendered by the Hon ble Bombay High Court in the case of CIT Vs. KEC Holdings Limited [2014 (7) TMI 139 - BOMBAY HIGH COURT] Hence, consistent with the view taken by the Tribunal in the assessee s own case, se set aside the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in the interest of natural justice, we are of the view that the assessee should be provided one more opportunity to prove the same. We shall make it clear that the addition made by the AO shall be sustained, if the assessee fails to prove to the satisfaction of the AO that the concerned accommodation was taken for the residential purposes of staff members of the assessee. The order of ld. CIT(A) on this issue stands modified accordingly. Disallowance of out of pocket expenses incurred in relation to Yes Bank - HELD THAT:- we notice that the assessee failed to file details of expenditures, purpose for which it was incurred, how it was incurred and how it was not recoverable from Yes Bank and steps taken for recovery of the same etc., either before the AO or before Ld CIT(A). In our view, the relevant details are necessary in order to decide about the allowability of this expenditure. Accordingly, we modify the order of ld. CIT(A) and restore the same to the file of the AO in order to provide an opportunity to the assessee to furnish relevant details. We shall make it clear that the addition made by the AO shall be sustained, if the assessee fails to furnish the details to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessing officer has accepted the claim of the assessee that the loss arising on sale of investments is a business loss in AY 2000-01, 2001-02, 2004-05 and 2005-06. In AY 2002-03, the AO treated the same as capital loss, but it has been reversed by the Ld CIT(A) and the revenue has accepted the same. We notice that the Ld CIT(A) has allowed the claim in AY 2002-03 by considering the business activities of the assessee. Since the AO has accepted the claim of the assessee in a number of years, we are of the view that the AO was not justified in taking different view in this year. Accordingly, we uphold the order of Ld CIT(A) on this issue. 5. The next issue contested by the revenue relates to the treatment of leasehold improvements as capital expenditure, which the assessee claimed the same to be revenue expenditure. The Ld CIT(A) allowed the same on observing that the assessee has incurred the expenditure on lease hold premises and no asset has come into existence. Accordingly he directed the AO to allow the same as revenue expenditure. The Ld A.R submitted that an identical issue was considered by the Tribunal in the assessee s own case relating to AY 2004-05 (referred supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y due to the assessee and when the assessee writes off this debt as irrecoverable, the same is allowable as deduction u/s 36(1)9vii), applying the ratio of the Apex Court in the case of TRF Ltd (2010-TIOL-15-SC-IT). In the instant case also, it is stated that the assessee did not receive TDS certificates from the debtor and hence it could not claim credit for the tax deducted at source amount. Accordingly the assessee has written off the TDS amount as irrecoverable. We notice that this issue identical with the issue decided by the Tribunal in the case of Indian Products Trading Co. Pvt Ltd (supra). Following the said decision, we set aside the order of Ld CIT(A) and direct the AO to allow this claim. 10. The next issue relates to the adhoc disallowances made out of following expenses:- (a) Business development expenses - 5,78,258 (b) Entertainment expenses - 3,10,606 (c) Advertisement and Publicity - 1,72,647 The assessee had incurred all these expenses in connection with the business promotion. The AO noticed that most of the expenses were in the nature of sponsorship of conferences, sponsorship for dinners, break-fasts, golf tournaments, musical programs, dona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence the assessee wrote off the rent deposit as irrecoverable. Since the assessee failed to give the details of employee, terms and conditions of employment etc, the AO disallowed the same. Further, the AO also observed that it is a capital loss. The Ld CIT(A) allowed the same by holding that the same is related to the business of the assessee. 14. Before us, the ld. AR relied upon the decision dated 19.11.2010 rendered by the Co-ordinate Bench of the Mumbai Tribunal in the case of ITO V/s Reliance Engineering Associates Pvt. Ltd in ITA No.6931/Mum/2008 relating to assessment year 2003-04 and submitted that rent deposit paid in respect of accommodation provided to the employees is a trade loss and is allowable under section 28 of the Act. However, we notice that the AO, inter alia, has stated that the assessee has failed to prove that the accommodation, for which the rent deposit of ₹ 46.50 lakhs was paid, was hired for the purposes of residence of the employees. Before us also, the assessee did not furnish the relevant details to support the said contention. In our view, the decision rendered by the Co-ordinate Bench of the Tribunal in the case of Reliance Engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate upon the said claim on the ground that the same is not arising out of assessment order. The ld. Counsel placed reliance on the decision of Hon ble Bombay High Court in the case of Pruthvi Brokers Shares Pvt. Ltd [2012] 349 ITR 336 (Bom) and submitted that the additional claim is maintainable before the appellate authority. Accordingly, he prayed that the ground of the assessee may be accepted and the same may be restored to the file of the AO for examining the same. Since, the claim of the assessee is admissible in view of the decision of the Jurisdictional High Court in Pruthvi Brokers Shares Pvt. Ltd (supra), we admit the same and also restore the same to the file of the AO with a direction to examine it and take appropriate decision in accordance with law. 18. The next issue relates to the rejection of claim for exemption u/s 10(23G) of the Act on the interest income. Following the decision taken by us in the earlier paragraphs for AY 2003-04, we set aside the order of Ld CIT(A) on this issue and direct the AO to allow exemption u/s 10(23G) of the Act to the assessee. 19. The next issue relates to the assessment of interest arising on Non Performing assets on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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