Income Tax Appellate Tribunal - Cochin
M/S.Platino Classic Motors India P. ... vs The Dcit, Cochin on 7 February, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
COCHIN BENCH, COCHIN
BEFORE S/SHRI CHANDRA POOJARI, AM & GEORGE GEORGE K., JM
I.T.A. No.75/Coch/2017
Assessment Year : 2010-11
M/s. Platino Classic Motors India Vs. The Deputy Commissioner of
P. Ltd., Income-tax, Circle-4(1), Kochi.
No.11/6B NH Bypass Road,
Maradu P.O.,
Kochi-682 304
[PAN:AADCK 1325N]
(Assessee-Appellant) (Revenue-Respondent)
Assessee by Shri R. Krishnan, CA
Revenue by Shri A. Dhanaraj, Sr. DR
Date of hearing 07/02/2018
Date of pronouncement 07/02/2018
ORDER
Per CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by the assessee is directed against the order of the CIT(A)-I, Kochi dated 21/12/2016 and is related to the assessment year 2010-11.
2. The assessee has raised the following grounds:
1) The learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.1,12,650/- made u/s. 40(a)(ia) in respect of payments to Advocate Niaz, which was not in the nature of reimbursement of professional service.2 ITA No.75/Coch/2017
2) The learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.2,10,600/- in respect of payment made by the appellant to the CIAL Golf and Country Club. The officers below ought to have appreciated that the appellant deals in a luxury product and such memberships are exclusively for business purposes and advantages.
3) The learned Commissioner of Income Tax (Appeals) erred in confirming Rs.2,47,610/- out of expenses incurred invoking the provisions of Section 37(1). He ought to have allowed the entire amount as attributable to business.
4) The learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.10,835/- towards various expenses incurred by the appellant.
5) The learned Commissioner of Income Tax (Appeals) erred in sustaining the additions of Rs.3,42,509/- and Rs.64,467/- debited under Business Promotion expenses, when these amounts were actually incurred for the business of the appellant.
3. At the time of hearing, the Ld. AR had pressed only one ground with regard to addition towards payment of Rs.2,10,600/- made to CIAL Golf and Country Club. It was the contention of the assessee that the said membership fee was paid to the CIAL Golf and Country Club which is having persons from the elite section of the society as members., some of whom could be potential customers of the BMW cars. According to the assessee, the visit to such club by MD or senior employees are utilized to highlight the products dealt by the company and such expenses are for running the business with a view to procure the benefits to the assessee.
3 ITA No.75/Coch/2017
3. According to the Ld. DR, the membership fees paid to CIAL Golf and Country Club are for the personal benefit of the Managing Director and senior employees of the assessee-company and it cannot be said that it was incurred wholly and exclusively for the purpose of business of the assessee, therefore, it cannot be allowed as deduction while computing the income of the assessee.
4. We have heard the rival submissions and perused the material on record. We find that the expenses were incurred in order to procure business. Whether the the assessee was successful in getting business or not is not the question. The intention is to be seen as the amount was spent towards advancement of business. It is business expenditure and therefore, it is to be allowed as deduction while computing the income of the assessee. Accordingly, we are inclined to decide the issue in favour of the assessee and against the department.
5. Since other grounds did not press before us on account of smallness of the amounts involved, we refrain from going into these grounds. 4 ITA No.75/Coch/2017
6. In the result, the appeal filed by the assessee is partly allowed.
Pronounced in the open court on 07th February, 2018.
Sd/- sd/-
(GEORGE GEORGE K.) (CHANDRA POOJARI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Place: Kochi
Dated: 07th February, 2018
GJ
Copy to:
1. M/s. Platino Classic Motors India P. Ltd., No.11/6B NH Bypass Road, Maradu P.O., Kochi-682 304.
2. The Deputy Commissioner of Income-tax, Circle-4(1), Kochi.
3. The Commissioner of Income-tax(Appeals)-I, Kochi.
4. The Pr.Commissioner of Income-tax, Kochi.
5. D.R., I.T.A.T., Cochin Bench, Cochin.
6. Guard File.
By Order (ASSISTANT REGISTRAR) I.T.A.T., Cochin