Income Tax Appellate Tribunal - Ahmedabad
Concept Securities Pvt. Ltd., , Surat vs Acit, Circle-1, Surat on 1 May, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
CAMP AT SURAT
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No. 1068/Ahd/2015
नधारण वष/Asstt. Year: 2010-11
Concept Securities Pvt. Ltd., Vs. ACIT,
401, Empire State Building, Circle-1,
Udhana Darwaja, Ring Road, Surat
Surat - 395002
PAN : AABCC 6956 F
अपीलाथ / (Appellant) तयथ
् / (Respondent)
Assessee by : Mr. Hiren Vepari
Revenue by : Mr. Kailash Ratnoo, Sr. DR
सुनवाई क तार ख/Date of Hearing : 24/04/2017
घोषणा क तार ख /Date of Pronouncement: 01/05/2017
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
The assessee is in appeal before the Tribunal against the order of ld. CIT(A)-I, Surat dated 24.02.2015 passed for AY 2010-11.
2. In the first ground of appeal, the assessee has pleaded that the ld. CIT(A) has erred in confirming the disallowance of Rs.35,000/- which was made by the Assessing Officer by making the disallowance out of stationery and printing expenditure. The ld. Counsel for the assessee did not press this ground of appeal; hence, it is rejected.
ITA No. 1068/Ahd/2015Concept Securities Pvt Ltd vs. ACIT AY : 2010-11 2
3. In ground No.2, the grievance of the assessee is that ld. CIT(A) has erred in confirming the addition of Rs.2,77,000/-.
4. The brief facts with regard to this issue are the assessee has filed its return of income on 23.09.2010 electronically. It has declared total income of Rs.1,10,67,621/-. The assessee has purchased a new car, i.e., Corolla Altis. On verification of the bill of the car, it was noticed by the Assessing Officer that the amount shown in the bill is of Rs.12,20,557/-, but in the ledger account and in the Schedule of fixed asset, the value of the car is shown at Rs.9,51,000/-. Thus, there was a difference of Rs.2,69,557/-. The case of the assessee is that it has an old car which was given to the dealer who has estimated the value of that car at Rs.2,77,000/- and after reducing the value of old car, the assessee has paid only Rs.9,51,000/-. Thus, the assessee has directly credited the block of motor car in the schedule of fixed asset at a sum of Rs.9,51,000/- instead of Rs.12,20,557/- The ld. Revenue Authorities did not accept this contention of the assessee on the ground that the assessee could not furnish supporting evidence, i.e., whether the registration of the old car was transferred in the name of the alleged dealer or some representative etc. Ld. Assessing Officer has made the addition of Rs.2,69,557/-. Appeal before the ld. CIT(A) did not bring any relief to the assessee.
5. We have duly considered the rival contentions and gone through the record carefully. It was pleaded by the assessee that a car namely Optra was shown as a part of block of asset by the assessee. This car was sold and in lieu of this car, new Corolla Altis was purchased. A credit of Rs.2,77,000/- for the old car was given. On due consideration of these facts, we are of the view that this aspect requires verification at the end of the ITA No. 1068/Ahd/2015 Concept Securities Pvt Ltd vs. ACIT AY : 2010-11 3 Assessing Officer. The ld. Assessing Officer shall verify the block of motor car in the schedule of fixed assets. He would verify whether any car, which was part of the block of the assets in the opening balance of written down value of the fixed assets, has been extinguished at the close of the accounts. If that be so, then he would consider the written down value of that car for reduction from the block of assets. This fact would help him to determine whether the assessee has actually availed the credit of Rs.2,77,000/- for alleged sale of old car or not. In other words, it is to be verified whether the assessee has received something representing the written down value of the old car or not; if the assessee has received something more than the written down value, it is to be dealt with in accordance with the provisions of Income-tax Act. The assessee should have not directly added the value of new asset by a reduced price; rather, the value of the new asset ought to be added at Rs.12,20,557/-. The treatment of eliminated asset is to be given separately. The ld. Assessing Officer shall verify this aspect and deal with it in accordance with the law. Thus, this ground of appeal of the assessee is allowed for statistical purposes.
6. In the next ground of appeal, the grievance of the assessee is that the ld. CIT(A) has erred in upholding the disallowance of Rs.1,74,327/-.
7. With the assistance of learned representatives, we have gone through the record carefully. It emerges out from the record that the assessee has incurred a sum of Rs.1,74,327/- towards Club Expenses. The ld. Assessing Officer has noticed the details of such expenditures in paragraph 7 of the assessment order. On verification of the details, ld. Assessing Officer found that these expenses were not incurred for the purpose of business and accordingly he disallowed the same.
ITA No. 1068/Ahd/2015Concept Securities Pvt Ltd vs. ACIT AY : 2010-11 4
8. On appeal before the ld. CIT(A), the assessee has made detailed written submissions and has relied upon various decisions of the Tribunal namely:-
i. 109 TTJ 631 (Bang A) - Infosys technologies Ltd;
ii. 19 DTR 295 (Del) - Samtel Color Ltd;
iii. (2005) 3 SOT 572 (Del) - Hero Honda Motors Ltd;
iv. 57 SOT 317 (Mum) - Jindal Iron & Steel Company Ltd;
v. 26 ITR (Trib) 406 (Mum) - IOT Infrastructre & Energy Ser. Ltd.
9. The ld.CIT(A) has considered all these decisions and confirmed the order of the Assessing Officer on this point by making following observations:-
"6.3. The submission of the appellate is duly considered in the light of facts of the case and case laws cited by the assessee have been perused. The case laws relied upon by the assessee are relating to "Corporate Membership"
which is not the case here. The director has become the member of the club and he is the direct beneficiary not the business. If at all any benefit has accrued to the business, the same might be incidental. Nonetheless, the onus is squarely on the assessee to demonstrate with the help of supporting evidences that business meeting/conference were held there and the expense incurred helped the business grow. The assessee did not furnish any such evidence and therefore the argument of expenses being for business purpose remained unfounded and a mere hollow assertion. In view of this, the disallowance of Rs.1,74,327/- is upheld as non-business/personal expense. This ground of appeal raised by the assessee fails."
10. Ld. Counsel for the assessee has reiterated his contentions as were raised before the Revenue Authorities below. The assessee is functioning has a broker of Bombay Stock Exchange and National Stock Exchange. It is a member of both these Stock Exchanges. The expenditures incurred in these clubs are not at all related in any manner to the business carried on by ITA No. 1068/Ahd/2015 Concept Securities Pvt Ltd vs. ACIT AY : 2010-11 5 the assessee. Both the Revenue Authorities have recorded categorical findings and distinguished the decisions relied upon by the assessee. After going through the findings of the ld. CIT(A), we do not find any merit in the contentions of the ld. Counsel for the assessee in this regard. Thus, this ground of the assessee is dismissed.
11. In view of the above discussion, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the Court on 1st May, 2017 at Ahmedabad.
Sd/- Sd/-
(AMARJIT SINGH) (RAJPAL YADAV)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 01/05/2017
*bt
आदे श क त ल!प अ"े!षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. #यथ / The Respondent.
3. संब&ं धत आयकर आय(
ु त / Concerned CIT
4. आयकर आय(
ु त(अपील) / The CIT(A)
5. !वभागीय त न&ध, आयकर अपील य अ&धकरण / DR, ITAT,
6. गाड, फाईल / Guard file.
आदे शानस
ु ार/ BY ORDER,
TRUE COPY
उप/सहायक पंजीकार (Dy./Asstt.Registrar)
आयकर अपील य अ&धकरण, अहमदाबाद / ITAT, Ahmedabad