TaxTMI 
TaxTMI 
2012 (10) TMI 323
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....se race tickets, of Rs. 36965.30 whereas it has credited an amount of Rs. 3948 lakhs only to the p&l account. The AO after referring to the appellant order in the case of the assessee for the year 2004-05 & 2005-06 held that the gross receipts/turnover in the case of the assessee for the current year shall be considered at Rs. 36965.36 lakhs and the assessee shall be allowed deduction for various payments made towards different expenditure, including payment made for betting tax and for payment made to winning punters, subject to disallowances, if any, out of the same. 4. On appeal, The CIT(A) held that the assessee has not maintained any separate vouchers/receipts for such payments made to winning punters. The CIT(A), thus, directed the AO to restrict the disallowance at 10% of the said claim of cash payments at Rs. 2,76,47,79,385/-. Aggrieved, the assessee is in appeal before us. 5. We have heard the arguments of both the parties, perused the record and gone through the orders of the authorities below. We find that this issue is covered by the order of the ITAT, Hyderabad benches in assessee's own case for AY 2007-08 vide in ITA No. 1425/Hyd/2011 vide pages 2 to 11 of the o....
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....ts and not out of normal business contracts. It was further submitted that without prejudice to the above submission, all those payments fall under the exemptions laid down under Rule 6DD(j) of the Income Tax Rules. After considering the submissions of the assessee, the CIT(A) held as under:- "8. I have carefully considered the submissions of the ld. AR. However, I do not agree with such contention that such cash payments made by the appellant during that period towards such winning payments are not business expenditure. In fact, having regard to the entirety of the business operation in the case of the appellant, such winning payments made by it to punters, on the winning tickets, clearly constitute business expenditure and the same are squarely covered under the provisions of section 40A(3) of the Act. Vide para 5.3 and 5.4 of my appellate order in ITA No. 0162 & 0162/CIT(A)-III/09-10 dated 07/- 1/2011 passed in the case of the appellant for the asst. Years 2004-05 and 2005-06, while holding that the said payments made to punters constitute business expenditure, I have also held that the same squarely fall under the provisions of section 40A(3) of the Act. Since the facts in t....
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....ays, claimed to have been made after working hours, during the previous year. Further, having regard to the specific comments made by the auditors in col.no. 17(h)(B), at page 3 of the said audit report in form 3CD, such contention regarding making cash payment after banking hours, is not true. For the aforesaid reasons, therefore, excluding only the sum of Rs. 35,516/-, which was paid on banking holidays, the other cash payments made on those days, in violation of provisions of section 40A(3) r.w.r. 6DD(j), discussed above, are liable for disallowance under that section i.e. 40A(3) of the Act. Hence, the AO was justified in disallowing three payments amounting to Rs. 28,338/- Rs. 1,89,995/- and Rs. 2,82,657/-, aggregating to Rs. 5,00,990/- u/s 40A(3) of the Act, in the assessment. Hence, the said disallowance made by him in the assessment order in this case is upheld. Thus, the grounds of appeal on above account are rejected." Aggrieved by the order of the CIT(A), the assessee is in appeal before us. 10. We have heard the arguments of both the parties, perused the record and gone through the orders of the authorities below. We find that this is squarely covered by the decisi....
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....taken for this purpose. This issue is remitted back to the files of the AO and AO is directed to re-compute the disallowance u/s 40A(3) as per the above disallowance and the Assessee shall furnish the particulars about the timings of the payment of the winnings to punters." 11. Since the issue under consideration is identical to the one decided by the Tribunal in assessee's own case for AY 2007-08 (supra), respectfully following the same, we restore the issue to the file of the AO to decide the same with identical directions as given by the Tribunal in assessee's own case in AY 2007- 08(supra). Thus, this ground is treated as allowed for statistical purposes. 12. Ground No. 3 is regarding charging of interest u/s 234B. Since charging of interest u/s 234B is consequential in nature, the Assessing Officer is directed accordingly. 13. In the result, appeal of the assessee is allowed for statistical purposes. ITA NO. 498/Hyd/12 - Revenue's appeal 14. Ground No. 1 is directed against the action of the CIT(A) in restricting the disallowance of payments of less than Rs. 2,500/- which are unverifiable made to 10% as against 15% estimated by the AO. 15. In the assessee's a....
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....e to other clubs. Under these circumstances and in view of the said appellate order dated 09/11/2009, of the CIT(A)-II, Hyderabad pertaining to such issue for the AY 2008-09, the said disallowance of Rs. 2,94,28,031/- made by the AO u/s 40(a)(ia) of the Act in the assessment is not sustainable. Hence, the same is deleted." Aggrieved, the revenue is in appeal before us. 19. We have heard the arguments of both the parties and perused the record and gone through the orders of the authorities below. We find that the issue is squarely covered by the decision of the ITAT, Hyderabad benches in assessee's own case for AY 2007-08(appeal filed by the revenue) in ITA No. 1569/Hyd/11 vide order dated 7th March, 2012, wherein the Tribunal held as under:- "29. Aggrieved the revenue is on appeal. We find that the TDS Officer by its order dated 6.4.2009 has treated the assessee as assessee in default for not deducting Tax at source and raised the demand u/s 201(1) and 201(1A). It is also been pointed by the AO that at present the assessee itself is making TDS on such payments which proves that the stand of the revenue is correct. The assessee has to establish that it is not acting as Agen....