TMI Blog2020 (4) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that the issue is covered by that decision. Therefore, respectfully following the decision of the coordinate bench we direct the learned Assessing Officer to delete the addition while computing book profit on account of disallowance under Section 14A made in the normal computation while computing book profit on account of disallowance under Section 14A made in the normal computation. Disallowance on account of coordinate social responsibility - AO stated that the above expenditure is not wholly and exclusively incurred for the business purposes of the assessee and hence disallowed - HELD THAT:- The assessee has incurred the above expenditure in improving the passenger facilities and the solar system at one of the railway stations which is run by Ministry of Railways. The Ministry of Railways is the only customer of the assessee. Therefore, these expenditure have direct nexus with the business of the assessee. Even otherwise Explanation (ii) inserted in section 36(1) with effect from 1.04.2015 is prospective in nature, impugned assessment year is assessment year 2011-12, we direct the Assessing Officer to delete the above disallowance. Addition on account of prior peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ms. Suchitra Kamble, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Appellant : Shri V. Raja Kumar, Advocate For the Respondent : Shri Amit Katoch, SR. D. R. ORDER PER PRASHANT MAHARISHI, AM : These are 5 appeals of the assessee and Revenue for assessment years 2011-12 and 2012-13 of the same assessee involving similar grounds of appeal and, therefore, they are disposed off by this consolidated order. Assessment Year : 2011-12 : 2. I. T. Appeal No. 380/Del/2016 is filed by the assessee and I. T. Appeal No. 515/Del/2016 is filed by the Deputy Commissioner of Income Tax, Circle-1, LTU, New Delhi, for assessment year 2011-12 against the order of the learned CIT (Appeals)-22, New Delhi, on 4.11.2015. The assessee has raised effectively the 5 grounds of appeal as under:- ITA No.380/Del/2016 1. The Ld. CIT (Appeals) has erred in not allowing complete relief of disallowance of ₹ 5,24,350/- made by Assessing Officer u/s 14A of Income Tax Act, 1961 while computing total income, ignoring the fact that no expenses have been incurred for earning dividend income on the basis of surmises and conjecture. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Apex Court in the case of Punjab State Industrial Development Corporation Ltd. vs. CIT [1997] 225 ITR 792 (SC) had upheld the finding of the ITAT, Cochin Bench, that expenditure incurred by the assessee for taking membership in the club was capital expenditure. 3. The brief facts of the case is that assessee company is a Government of India Undertaking dealing in leasing and finance activities exclusively for the Indian Railways. It is engaged in leasing rolling stock assets to the Ministry of Railways on a single plan relationship basis. It raises funds through loans from the banks and issues bonds. It owns lease rent and earlier interest income. For assessment year 2011-12 it filed its return of income on 29.09.2011 declaring NIL income under the normal computation provisions and disclosed a book profit of ₹ 8,99,28,17,953/- under Section 115JB of the Income Tax Act, 1961 (the Act). The learned Assessing Officer passed an assessment order under Section 143(3) of the Act on 11.03.2014 computing the normal income at a loss of ₹ 13,64,43,99,192/- and also computed the book profit at ₹ 8,99,36,02,727/-. As the book profit tax was higher it was assessed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer in the normal computation. The learned Authorized Representative submitted that this issue is squarely covered by the order of the coordinate bench in assessee s own case in para No. 15 wherein following the decision of the Special Bench in the case of Vireet Investment in ITA. No. 502/Del/2012 the addition is deleted. The learned Departmental Representative also stated that the issue is covered by that decision. Therefore, respectfully following the decision of the coordinate bench we direct the learned Assessing Officer to delete the addition of ₹ 5,24,350/- made by the learned Assessing Officer while computing book profit on account of disallowance under Section 14A made in the normal computation. Accordingly ground No. 2 of the appeal is allowed. 7. Ground No. 3 is with respect to the disallowance of ₹ 47,53,000/- on account of coordinate social responsibility. The assessee has claimed the above expenditure stating that ₹ 24.96 lakhs and ₹ 22.57 lakhs are incurred towards passenger amenities improvement at Bahadur Garh Railway Station and solar lighting at that railway station respectively. The learned Assessing Officer stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r year it cannot be said to be a prior period expenditure. Similarly in the earlier year in assessee s own case ITAT has deleted the above disallowance. Therefore, respectfully following the decision of the coordinate bench, we direct the Assessing Officer to delete the disallowance of ₹ 2,217/- of prior period expenses. 9.2 Ground No. 4 of the appeal is allowed. 10. Ground No. 5 of the appeal is with respect to adjustment of book profit at ₹ 2,60,424/- in the book profit on account of Leave Travel Assistance. In the assessment order for the year the above adjustment has been made by the learned Assessing Officer without making any discussion that how the provision for Leave Travel Assistance can be added. The learned CIT (Appeals) also confirmed the above adjustment. Before him holding that the CIT for assessment year 2010-11 has confirmed the similar addition. 10.1 The learned Authorized Representative submitted that the above issue is squarely covered against the assessee vide para No. 16 of the order of the co-ordinate bench wherein an identical addition was confirmed. The learned Departmental Representative also confirmed the same. 10.2 We have carefull ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer disallowed the same holding that it is the payment of enduring benefit and hence of capital nature. So he disallowed the same. The learned CIT (Appeals) allowed the claim of the assessee holding that the same is allowable under Section 37(1) of the Act. 13.1 The learned Departmental Representative submitted that it is the corporate membership, hence same is of enduring benefit and, therefore, correctly disallowed. The learned Authorized Representative supported the order of the learned CIT (Appeals). 14. We have carefully considered the rival contention and find that the assessee has paid this sum for corporate membership of Airport Authority of India Officers Institute. The fact has been noted that the personal expenses of the executives are not incurred. The identical issue arose before the Hon ble Delhi High Court in 239 ITR 237 wherein it has been held that such expenditure did not bring into existence any benefit of enduring nature. Further the Hon ble Punjab Haryana in 351 ITR 196 and Hon ble Gujarat High Court in 106 taxmann.com 395 has also taken a similar view. In view of this ground Nos. 2 and 3 of the appeal of the assessee are dismissed. 15. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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