INTERPOLE TECHNOLOGIES PVT LTD.,MUMBAI vs. ITO 14 (2)(1), MUMBAI

आअसं. 7514/मुं/2019 (िन.व.2013-14) (A.Y.2013-14) 2. Ms. Neelam Jadhav appearing on behalf of the assessee submitted that the assessee in appeal has assailed: 1. Disallowance of Card Renewal Fee Rs. 56,180/- 2. Disallowance of Business Promotion Expenses Rs. 2,25,102/- The ld. Authorized Representative (AR) of the assessee submitted that the assessee is engaged in Information Technology business. In the books, the assessee interalia claimed Club Membership Fee and Card Renewal Fee. In assessment proceedings, the Assessing Officer (AO) disallowed both the aforesaid expenditure holding it to be unrelated to the business. The assessee carried the issue in appeal before the CIT(A). The CIT(A) allowed Club Membership Fee as Business Expenditure and disallowed Card Renewal Fee. The ld. AR submitted that the Card was exclusively used for business purposes. In the preceding AYs and succeeding AYs, the Card Renewal fee was allowed as business expenditure in assessments completed under section 143(1) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’]. 2.1 With regard to business promotion expenses, the ld. AR submitted that the details of expenditure incurred were submitted during assessment proceedings. Substantial payments on this account were made through Credit Card. The Credit Card statement was furnished to substantiate that payments were made for business purpose. The expenditure has been disallowed merely for the reason that the names of the clients and the place of meeting were not furnished. The assessee has been claiming business promotion expenses of similar nature in the past. In AY 2007-08, the expenditure was allowed in assessment completed under section 143(3) of the Act.

Both sides heard, orders of the authorities below examined. The assessee is in appeal against disallowance of card renewal fee. A perusal of the impugned order shows that the assessee has paid annual card fee of Rs. 56,180/-. The assessee purportedly upgraded the card which provides higher reward points and better foreign exchange rate. The sole contention of the assessee is that in the preceeding and succeeding AYs, similar expenditure has been allowed. However, no documentary evidence whatsoever was furnished by the assessee to show that the card is being used for business purpose. The ld. AR of the assessee has admitted that in preceding AY and succeeding AYs similar expenditure has been allowed in assessments completed under section 143(1) of the Act. Thus, there was no occasion for the AO to examine the nature of expenditure and its allowability. Therefore, the rule of consistency will not apply. Hence, the ground no.1 raised in appeal is dismissed.

In ground No.2 of appeal, the assessee has assailed disallowance of business promotion expenditure. The contention raised by ld. AR is that the payment for expenditure was made through Credit Card. The statements of the Credit Card were furnished to substantiate nature and expenditure, however, the authorities below failed to examine the same. Once, the assessee has