TaxTMI 
TaxTMI 
2021 (9) TMI 637
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.... has erred in not accepting the contentions of the assessee that various expenses incurred by the assessee viz., PMS charges, professional fees salary is integral to the investment activity undertaken by him and to earn the income returned in the return of income for the previous year. In view of this the assessee believes that the expenses claimed under Section 57 of Rs. 18,89,670/- as a deduction from the total income is fully justifiable. 1.1 Commissioner of Income Tax (Appeals) has also not appreciated the fact that certain class of assets may not earn income in a certain year viz., investment in unlisted equities and foreign investments and that this fact will not hamper the allowability of the expenditure incurred to manage a....
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.... contentions even assuming but without admitting that the action of the learned Commissioner of Income Tax (Appeals) upholding the disallowance to be in order, The learned commissioner ought to have restricted the disallowance to the amount actually claimed of Rs. 18,89,670/- and not Rs. 39,34,034/-. The amount of Rs. 39,34,034/- includes an amount of Rs. 20,44,364/- already disallowed u/s. 14A by assessee, while computing the amount claimed u/s. 57. Consequently this has resulted in double disallowance of Rs. 20,44,364/-. 3. Without prejudice to the foregoing contentions even assuming but without admitting that the action of the learned Commissioner of Income Tax (Appeals) upholding the disallowance to be in order, The learned com....
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.... the following disallowances: a) Disallowance under section 14A Rs. 20,44,364/- b) Disallowance of expenses under other sources Rs. 24,05,536/- Total Rs. 44,50,000/- 3. On appeal, the CIT(Appeals) restricted the disallowance to Rs. 39,34,034. Against this, the assessee is in appeal before us. 4. After hearing both the parties, we find that the issue is squarely covered in favour of the revenue by the order of the Tribunal in assessee's own case for the AY 2014-15 in ITA No. 614/Bang/2018 vide order dated 31.7.2019 wherein the Tribunal followed the order dated 20.04.2018 for the AY 2012-13 in assessee's own case wherein it was held as under:- "8. As per the provisions of section 57(iii) of IT Act, any....
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....d above, it is seen that there is no claim regarding any expenses specified in clause (i) of section 57 i.e. commission or remuneration to banker or any other person for the purpose of realising dividend or interest income because the assessee has claimed deduction on account of PMS charges, Salaries, Professional charges, vehicle maintenance, travel, computer maintenance, printing and stationery, telephone charges and bank charges. Hence no deduction is allowable in the present case under clause (i) of section 57. 9. Regarding the allowability of deduction under clause (iii) of section 57, it has to be established by the assessee that expenditure has been exclusively laid out or expended wholly and exclusively for the purpose of m....
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....vs. ACIT (supra). In that case, lease rent income was to be assessed as income from other sources and the assessing officer held that expenditure allowable is restricted to only such payment, which is separately binding on the employer and legal entity, i.e., company, such as salaries, PF, ESI and other inevitable expenses. In that case, the assessee was a company and the Tribunal has followed the judgment of Hon'ble Calcutta High Court rendered in the case of CIT Vs. Ganga Properties Ltd. as reported in 199 ITR 94 in which it was held that expenditure incurred in complying with statutory obligations is deductible u/s. 57(iii) of IT Act. As per the relevant para of judgment reproduced by the Tribunal, it was noted that even if a company....
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....that assessee being a company, this Tribunal order is also not applicable in the present case. The nature of expenses in dispute in that case are noted by the Tribunal in the form of a table and from the same, it is seen that the expenses claimed in that case were regarding the personal expenses of Directors, travelling expenses of others, Motor car expenses, security charges, printing and stationery, staff welfare, flowers and plants, AGM expenses, Board meeting expenses, miscellaneous expenses, rent paid, subscription to club, Interest on purchase of car, legal expenses etc. Hence it is seen that as per the nature of expenses involved in that case, the expenses were in relation to the fulfilling the requirements of company law to have dir....