Tax appeal partially allowed; deduction disallowed for lack of evidence; income treatment remanded; withholding tax issue set aside.

The appeal was partly allowed for statistical purposes. The disallowance of deduction claimed on payment of membership fee and expenditure on acquiring educational qualification was upheld due to lack of evidence linking them to business benefits. The treatment of income from properties was remanded for fresh adjudication. The disallowance under section 40(a)(i) was set aside as the payments were not subject to withholding tax. The matter of granting due credit for prepaid taxes and levying interest under sections 234B and 234C were allowed for statistical purposes.

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Issues Involved:
1. Disallowance of deduction claimed on payment of membership fee to Jain Vishva Bharati.
2. Disallowance of expenditure incurred on acquiring educational qualification by one of the partners.
3. Treatment of income from properties as income from other sources versus house property.
4. Disallowance under section 40(a)(i) of the Act on account of annual support payment and registration fee.
5. Granting due credit for prepaid taxes.
6. Levying interest under sections 234B and 234C of the Act.

Issue-wise Detailed Analysis:

1. Disallowance of Deduction Claimed on Payment of Membership Fee to Jain Vishva Bharati:
The assessee, a Chartered Accountant Firm, claimed a deduction for a Rs. 21,000/- membership fee paid to Jain Vishva Bharati, arguing it benefited the business by attracting bright students for internships. The AO disallowed this, viewing it as non-business expenditure. The CIT(A) upheld this, finding the connection between the fee and business benefits unsubstantiated. The Tribunal agreed, noting the lack of evidence showing the fee's direct business benefit and dismissed the assessee's ground.

2. Disallowance of Expenditure on Acquiring Educational Qualification:
The assessee claimed a deduction of Rs. 9,87,307/- for a partner's MBA in Spain, asserting it would benefit the business. The AO rejected this, deeming it personal and capital expenditure. The CIT(A) upheld this, referencing Karnataka High Court's decision in Mac Explotee P. Ltd., which emphasized that personal educational expenses can't be business expenses. The Tribunal found no evidence linking the MBA to business benefits and upheld the CIT(A)'s decision.

3. Treatment of Income from Properties:
The AO treated income from the assessee's properties in Delhi and Mumbai as income from other sources, not house property, based on past treatment in earlier years. The CIT(A) agreed. The Tribunal, considering the Supreme Court's decision in Raj Daddarkar & Associates, remanded the issue to the AO for fresh adjudication, allowing the assessee to present supporting evidence.

4. Disallowance Under Section 40(a)(i) on Annual Support Payment and Registration Fee:
The assessee paid Rs. 2,08,234/- to Horwath International for referral services and claimed it as a business expense. The CIT(A) disallowed this under section 40(a)(i). The Tribunal, referencing Kerala High Court's decision in Malayala Manorama Co. Ltd., found the payments to a non-resident body without a permanent establishment in India not subject to section 195(1) withholding tax. Thus, the Tribunal set aside the CIT(A)'s order and allowed the assessee's ground.

5. Granting Due Credit for Prepaid Taxes:
The CIT(A) remanded the matter to the AO for verification and due credit for prepaid taxes. The Tribunal noted that while the CIT(A) lacks remand jurisdiction, it regularized the direction under section 254, allowing the ground for statistical purposes.

6. Levying Interest Under Sections 234B and 234C:
The CIT(A) directed the AO to verify relevant facts for interest calculation under sections 234A, 234B, and 234C. The Tribunal, exercising its power under section 254, regularized this direction, allowing the ground for statistical purposes.

Conclusion:
The appeal was partly allowed for statistical purposes, with specific issues remanded for fresh adjudication and others upheld based on the lack of evidence or legal precedents. The order was pronounced in open court on 28.11.2018.

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