ACIT, CIRCLE-4(1), KOLKATA, KOLKATA vs. M/S APEEJAYSURRENDRA CORPORATE SERVICES LTD., KOLKATA

This appeal filed by the Revenue against the order dated 09.03.2017 passed by CIT(A)-15, Kolkata for AY 2008-09.

We have heard Sh. S. Dasgupta, Addl. CIT DR on behalf of the Revenue and Sh. Manish Tiwari, Ld. Counsel for the assessee.

On a careful consideration of the facts and circumstances of the case, we hold as follows.

Ground No.01 to 03 are on the issue of allowing as a deduction the payment made of additional bonus and ex-gratia during the year. This expenditure related to M/s Empire & Singlo Tea Co. Ltd. which had merged with the assessee company. The AO disallowed the payment on the ground that the assessee did not explain whether the said amount was debited to the P&L A/c in the earlier year and thereafter on section 43B of the Income Tax Act, 1961 (in short “Act”). Ld.CIT(A) allowed the claim of the assessee by observing that, the provision in question was made in the accounts of M/s Empire & Singlo Tea Co. Ltd. and the same was Year: 2008-09] added to the income of that company prior to merger u/s 43B of the Act. As the said M/s Empire & Singlo Tea Co. Ltd. Has now merged with the assessee company during the year, the amount was allowed as a deduction, in the computation of income on payment basis. We find no infirmity in this decision of Ld.CIT(A). The amount was paid during the year and hence is allowable during the year. There is no additional evidence admitted by the Ld.CIT(A). Hence Ground Nos.1 to 3 are hereby dismissed.

Ground No.4 is on the disallowance of club fee. Ld.CIT(A) followed the judgements of the Hon’ble Madras High Court in the case of CIT vs Sundram Industries [2000] 158 CTR 437 (Mad.); and the judgement in the case of M/s. Pritam Hotels Pvt. Ltd. vs ITO 17 TTJ 550 (Bom.) and held that, the expenditure is allowable as business expenditure as the club in question was used as meeting point with the executives of other tea companies for business purposes. Therefore, Ground No.4 is also dismissed.

Ground No.5 is on the issue of allowable of land revenue of Rs.1,38,191/- and professional tax of Rs.4,995/-. In this case also, the claim was made on actual payment basis. Provisions had been made in the books of account of M/s Empire & Singlo Tea Co. Ltd. in earlier years and were suo moto disallowed in the computation of income in those years, prior to merger. Thus, we find no infirmity in these findings.

Ground Nos.6 to 8 are general in nature and require no adjudication.

In the result, the appeal of the Revenue is dismissed.