TaxTMI 
TaxTMI 
2014 (3) TMI 887
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....er: "1. 1. BECAUSE the "CIT(A)" has erred in law and on facts in holding that payments of; (Rs.) (i) Repairs & Maintenance (others) 6,07,904 (ii) Insurance premia (paid on the lives of the directors) 2,01,090 (iii) Electricity expenses paid for electric Consumption at the residence of directors represented "personal expenditure", not allowable as such in the assessment of the "appellant".7,61,573 2. BECAUSE the expenses under various heads (as had been claimed as deduction under various heads) had been incurred by the "appellant" in its character as a business man and that too during the course of carrying on of its business and accordingly no part of the same could have been disallowed by holding the same was attributable to the "personal expenditure of the directors". 3. BECAUSE expenses on 'running and maintenance of vehicles' and 'depreciation' thereof (out of which disallowance of Rs.6,07,904 has been made) related to the 'user' for the purposes of business of the appellant and disallowance made/sustained by the authorities below on this score, is wholly erroneous. 4. BECAUSE looking to the business exigencies, the directors are req....
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....ing the disallowance of Rs.6,19,447/- on account of circulation & Advt. Prom. Expenses without appreciating the facts that the disallowance is made in respect of expenses whereof business expediency could not be sustained. 5. That the order of Ld Commissioner of Income tax (A)-I, Kanpur being erroneous in law and on the facts deserves to be vacated and that the order of Assessing Officer be restored. 6. That the appellant craves leave to modify any of the grounds of appeal given above and/or add any fresh ground as and when it is considered necessary to do so." 5. Brief facts of the case are that the following expenses were disallowed by the Assessing Officer: (a) Out of telephone expenses 3,00,000.00 (b) Out of travelling expenses 2,47,255.00 (c) Out of repairs & maintenance Expenses (others) 6,07,904.00 (d) Out of repairs & maintenance building 12,45,952.00 (e) Out of rent expenses 10,00,000.00 (f) Out of circulation & Advt. prom. Expenses 6,19,447.00 (g) Out of power & fuel expenses 7,61,573.00 (h) Out of insurance expenses 2,01,090.00 5.1 Out of the above expenses, the CIT(A) deleted the disallowance at Sl. No. (a), (b), (d), (e) & (f) for wh....
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....ce was deleted by CIT(A) as per para 8(c) of his order in which he has noted that this disallowance was made by the Assessing Officer on the basis of his doubt that the payment of this amount to M/s Explorer Associates is capital in nature but the Assessing Officer has not given any specific and definite finding that it was an expenditure on capital account. He has also noted that various case laws in respect of repairs and maintenance show that the addition/alteration made to an asset which is being used in the business, is allowable as current repairs. The CIT(A) has followed the judgment of Hon'ble Uttarakhand High Court rendered in the case of CIT vs. Hotel Control Pvt. Ltd. reported in [2004] 266 ITR 109 (Uttar). 8. Learned D.R. of the Revenue could not controvert this finding of CIT(A) and could not show that how this judgment is not applicable in the facts of the present case and, therefore, on this issue also, we do not find any reason to interfere in the order of learned CIT(A). 9. The next item is the deletion of disallowance made by the Assessing Officer of Rs.10,00,000/- on account of enhanced payment of rent. This disallowance was deleted by CIT(A) as per par....
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....rsonal use of vehicle by the directors although the same may be considered as a perquisite in the hands of the concerned director. Hence, we delete this disallowance. 16. The second issued raised by the assessee is confirming the disallowance of Rs.2,01,090/- made by the Assessing Officer in respect of insurance premium paid on the life of the directors. On this issue, it is observed by CIT(A) in para 8(g) of his order that this disallowance was as per the Tax Audit Report and no specific reply has been made on this issue in the submission dated 28/10/2010. Regarding this issue, a query was raised by the Bench whether this payment of insurance premium on behalf of the directors has been included in the perquisite value of the directors and in reply, it was submitted that copy of Form-16 issued by the company of the directors is available on pages 50 to 82. While going through these forms, it was seen that copy of Form 12BA is also available, which is a statement showing particulars of perquisites etc. as per Rule 26A. It was also seen that value of the perquisite on account of insurance premium is not included in the same because the only perquisite shown by the assessee is rega....
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....ounds raised by the assessee in its appeal for assessment year 2006-07 i.e. I.T.A. No.126/Lkw/2011 are as under: "1. BECAUSE the "CIT(A)" has erred in law and on facts in holding that claim for additional deduction of Rs.19,79,80,771/- as had been made under section 35D, in terms of letter dated 27.11.2008 filed during the course of assessment proceedings, could not be entertained in view of the principle laid down by the Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT reported in (2006) 284 ITR 323. 2. BECAUSE "CIT(A)" has further erred in law and on facts in holding that : (a) the "appellant's" claim for deduction of sum of Rs.19,79,80,771/- cannot be said to be referable to the "capital employed" as envisaged in section 35D(3); and (b) at any rate and without prejudice to (a) as aforesaid the capital employed could at the best be calculated at Rs.10.39 Crores which was the face value of the shares issued under Initial Public Offer (IPO) and accordingly a sum of Rs.50.20 lacs (being 5% of Rs.10.39 Crores) could alone at best, be held to be available for amortization in five years. 3. BECAUSE "CIT(A)" has erred in law and on facts in holding....
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....e made by the Assessing Officer of Rs.48,13,034/- out of administrative expenses by invoking the provisions of section 14A out of which CIT(A) has deleted the disallowance to the extent of Rs.46,13,034/- and confirmed the disallowance of Rs.2,00,000/-. The Revenue is in appeal for the disallowance deleted by CIT(A) and the assessee is in appeal for the part disallowance of Rs.2,00,000/- confirmed by CIT(A) and in the Cross Objection also, the same issue is raised by the assessee. 21. On this issue, Learned D.R. of the Revenue supported the assessment order whereas it is submitted by learned A.R. of the assessee that Rule 8D is not applicable in this year and the estimate made by CIT(A) of Rs.2,00,000/- is without any basis. Regarding the part disallowance deleted by CIT(A), he placed reliance on the order of CIT(A). He also submitted that copy of the written submissions of the assessee filed before the CIT(A) dated 30/08/2010 is available on page No. 16 to 28 and the same dated 05/10/2010 is available on page No. 26 to 29 of the paper book. He also placed reliance on the Tribunal decision rendered in the case of Raj Kumar Jain vs. ACIT [1994] 208 ITR (AT) 22 (All). 22. We hav....
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....essee stand allowed partly for statistical purposes. 28. Now we take up the cross appeals of the assessee and the Revenue for assessment year 2007-08. 29. In its appeal the assessee has raised the following grounds: "1. BECAUSE notice under section 143(2) having not been issued with reference to the successive revised "returns" filed by the appellant, entire "variation" between the " returned income" and " assessed income" as made/sustained by the authorities below, as per particulars given below:- is vitiated and the same is liable to be quashed. 2. BECAUSE in any case, there is an apparent "disharmony" between the "Income-tax Authority" issuing notice under section 143(2) and the "Income-tax Authority" passing the assessment order and owing to such a "disharmony", the assessment order dated 31.12.2009 as also the "variation" between the "returned income (finally revised)" and "assessed income" (as per particulars given in ground No. 1 hereinfore) is wholly without jurisdiction and accordingly deserved to be held and declared as void ab-initio. 3. BECAUSE the Jt. CIT being not validly vested with the jurisdiction of the Assessing Officer in the instant case, the ....
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....ads of expenditure including "other expenses" were fully verifiable and disallowance of Rs.1.00 lac as sustained by CIT(A) out of adhoc disallowance of Rs.5.00 lacs (as made in the assessment) is wholly arbitrary and in any case much too high and excessive. 6. BECAUSE CIT(A) has erred in law in upholding the applicability of section 14A of the Act, in the case of the appellant and in sustaining a disallowance to the extent of Rs.2.00 lacs (out of disallowance of Rs.52,32,539/- as had been made in the assessment). 7. BECAUSE no expenditure was incurred by the appellant, which could be said to be attributable to the "tax free income" earned by the appellant and adhoc disallowance out of "expenses" as has been sustained by the CIT(A) at Rs.2.00 lacs is wholly erroneous. 8. BECAUSE the CIT(A) while estimating the element of disallowance of Rs.2.00 Lacs out of expenses, has failed to appreciate that expenditure incurred by the appellant was attributable, wholly and exclusively to the business carried on by it, income wherefrom was taxable and accordingly no disallowance was called for, even by invoking the provisions of section 14A of the Act. 9. BECAUSE the order appealed a....
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....y way of additional ground but the assessee has not done so. Moreover, the only objection of the assessee is that the Assessing Officer has not issued notice u/s 143(2) of the Act with reference to the successive revised return filed by the assessee. The learned AR of the assessee has not raised any argument during the course of hearing before us on this issue and learned A.R. of the assessee has simply submitted his arguments on merit of various issues raised in this appeals and it was agreed that these issues are identical to various issues raised by both the sides in preceding two years, which were heard together i.e. assessment year 2004-2005 and 2006-2007 and therefore, the same can be decided on similar lines. Hence, from this conduct of learned A.R. of the assessee, it comes out that he has nothing to argue on this legal issue before us but still we decide this issue as per the legal position. In our considered opinion, a revised return furnished u/s 139 (5) of the IT Act is nothing but rectification of the earlier return submitted u/s 139 (1). If that is not so, a person can file revised return only once to rectify the return filed by him u/s 139 (1) because filing any subs....
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....) is rejected. 35. The next issue raised by the assessee is interconnected with ground No. 1 raised by the Revenue. In fact, the Assessing Officer made disallowance of Rs.5,00,000/- out of expenses of Rs.343.47 lacs. The learned CIT(A) upheld the disallowance to the extent of Rs.1,00,000/- only and deleted the balance disallowance of Rs.4,00,000/-. Now the Revenue is in appeal for the disallowance deleted by CIT(A) of Rs.4,00,000/- and the assessee is in appeal for the disallowance confirmed by CIT(A) of Rs.1,00,000/-. We find that this issue was decided by CIT(A) as per the following para on page 4 of his order: "From the perusal of the assessment order, it is clear that this amount has been disallowed by the AO on estimated basis without mentioning any specific item which should be disallowed. As such, I agree with the submission of the assessee and find the disallowance to be on higher side. I direct the AO to restrict this disallowance to Rs.1,00,000/- only. This ground of appeal is partly allowed." 36. We find that CIT(A) has stated in the above para that the amount has been disallowed by the Assessing Officer on estimated basis without mentioning any specific item....