THE FEDERATION OF MOTOR SPORTS CLUBS OF INDIA,CHENNAI vs. ITO(EXEMPTIONS ) WARD-4, CHENNAI

Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 18-09-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 28-03-2016. The sole grievance of the assessee is confirmation of addition of Rs.35 Lacs. Having heard rival submissions, the appeal is disposed-off as under.

From the case records, it emerges that the assessee is registered u/s 25 of the Companies Act. In AY 2012-13, the assessee made provision towards prize giving ceremony and the same being mere provision, was disallowed in that year. In this year, the assessee claimed to have spent an amount of Rs.26.39 Lacs and offered the remaining Rs.8.60 Lacs as income being the unutilized amount. The assessee claimed that the amount of Rs.26.39 Lacs should be allowed as expenditure in this year and balance Rs.8.60 Lacs should be reduced from income. However, considering the fact that the assessee’s appeal for AY 2012-13 was pending before first appellate authority, the plea of the assessee was not accepted by Ld. AO. The Ld. CIT(A) confirmed the same.

The Ld. AR placed on record first appellate order for AY 2012-13 dated 31-08-2023 wherein the disallowance of provision of Rs.35 Lacs has been confirmed. The Ld. AR submitted that the assessee has accepted the same and has not appealed against the same. Considering the same, we direct Ld. AO to verify the claim of the assessee. If this disallowance has reached finality in AY 2012-13, the expenditure incurred in this year would be allowable and the additional income of Rs.8.60 Lacs as offered by the assessee would be reduced from its income. We order so. 4. The appeal stand allowed for statistical purposes. Order pronounced in open court on 08th April, 2024.