2026 (1) TMI 756

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....f club expenses as against the total addition made by the ld. AO of Rs.5,81,098/- incurred by the assessee in respect of club subscription charges. 2.1. The facts in brief are that the ld. AO during the course of assessment proceedings found that the assessee has debited to the profit and loss account a sum of Rs.5,85,098/- on account of club subscription charges. According to the ld. AO these expenses are personal in nature and not expended wholly and exclusively for the purpose of business and therefore, not allowable. Consequently, these were added to the income of the assessee. 2.2. During the appellate proceedings, the ld. CIT (A) deleting the disallowance of subscription and entry fees to the tune of Rs.1,53,184/- on the ground ....

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.... in the case of Commissioner of Income Tax vs. United Glass Mfg. Co. Ltd. [2012] 28 taxmann.com 429 (SC) dated 12-09-2012 and Commissioner of Income-tax vs. Johnston Pumps (India) Ltd. [1988] 172 ITR 333 (Calcutta) dated 24-07-1986. Therefore, we modify the finding of the ld. CIT (A) and direct the ld. AO to delete the entire addition. The ground no.1 is allowed. 3. The issue raised in ground no.2 is against the order of ld. CIT (A) confirming the addition of Rs.1,33,25,000/-u/s 14A read with Rule 8D of the Rules. 3.1. The facts in brief are that the ld. AO during the course of assessment proceedings, noted that the assessee has earned dividend income of Rs.7.47 crores during the year which was also disclosed by the assessee in note n....

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....e investments which yielded the exempt income as well as the investments which did not yield any exempt income during the year. We note that the assessee has made before the ld. AO without prejudice submission that if the main plea of the assessee is not accepted which is qua the fact that the assessee has not incurred any expenses towards earning of exempt income and even if the provisions of Section 14A read with Rule 8D is invoked even then the disallowance works out to Rs.59,40,500/- based upon the average value of investments which yielded exempt income during the year. The assessee has made a very detailed arguments before us corroborating all these facts and in the light of various case laws/ decisions, we hold that the disallowance ....

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....t the order of ld. CIT (A) confirming the addition of Rs.1,33,25,000/- as made by the ld. AO u/s 14A read with Rule 8D of the Rules to the book profit u/s 115JB of the Act. 4.1. After hearing the rival contentions and perusing the materials available on record, we find that the ld. AO has added the amount of disallowance of Rs.1,33,25,000/- to the book profit as computed u/s 115JB of the Act which in our opinion is wrong and cannot be sustained. The ld. CIT (A) confirmed the order of the lower authorities AO on this issue. The case of the assessee is squarely covered by the decision of Hon'ble Apex Court in the case of Apollo Tyres Ltd. vs. Commissioner of Income-tax [2002] 122 Taxman 562 (SC)/[2002] 255 ITR 273 (SC)/[2002] 174 CTR 5....