DCIT, Port Blair, V. ANIIDCO,

ITA 1124/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9461 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Keywords: Business expenditure; Corroborative evidences
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI ABY.T.VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1124 / KOL / 2014 ASSESSMENT YEAR :2009-10 DCIT, PORT BLAIR M.B. 210, SHADIPUR PORT BLAIR, A & NI -744 106 V/S . ANDAMAN NICOBAR ISLAND INTEGRATED DEVELOPMENT CORPORATION LTD., VIKAS BHAWAN, PORT BLAIR, 143/1/1, COTTON STREET, KOLKATA-700 007 [ PAN NO.AACCA 4070 B ] /APPELLANT .. / RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI D.S. DAMLE, FCA /DATE OF HEARING 30-01-2017 /DATE OF PRONOUNCEMENT 08-02-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA DAT ED 27.01.2014. ASSESSMENT WAS FRAMED BY ACIT, ANDAMAN & NICOBAR IS LANDS, PORT BLAIR U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2011 FOR ASSESSMENT YEAR 2009 -10. 2. AT THE OUTSET IT WAS NOTICED THAT THE REVENUE HA S NEITHER APPEARED BEFORE US NOR MOVED ANY ADJOURNMENT PETITION. IN SU CH SITUATION, WE DECIDED TO PROCEED TO ADJUDICATE THE MATTER AFTER HEARING S HRI D.S. DAMLE, LD. AUTHORIZED REPRESENTATIVE APPEARED ON BEHALF OF ASS ESSEE. ITA NO.1124/KOL/2014 A.Y. 2009-10 DCIT PORT BLAIR VS. ANIIDCO PAGE 2 3. FACTS IN BRIEF ARE THAT ASSESSEE IN THE PRESENT CASE IS A LIMITED COMPANY AND ENGAGED IN BUSINESS OF PROCUREMENT AND DISTRIBUTION OF IRON & STEEL, MILK, VEGETABLES AND PROMOTION OF TOURISM AN D CATERING. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS FILED ITS REVI SED RETURNED ELECTRONICALLY DECLARING TOTAL INCOME OF 10,20,25,351/-. SUBSEQUENTLY THE RETURN WAS SELECTED FOR SCRUTINY THROUGH CASS MODULE. ACCORDIN GLY, NOTICE U/S. 143(2)/142(1) OF THE ACT WERE ISSUED UPON THE ASSES SEE. THE ISSUE WAS FRAMED U/S 143(3) OF THE ACT AT TOTAL INCOME OF 11,26,92,090/- AFTER MAKING CERTAIN ADDITION / DISALLOWANCES. 4. FIRST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) IN DELETING THE DISALLOWANCE FOR 87,54,195/- ON ACCOUNT OF PRIOR PERIOD EXPENSES. 5. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HA S CLAIMED PRIOR PERIOD EXPENSES FOR 87,54,195/-. ON QUESTION BY THE AO ABOUT THE ALLOWA BILITY OF PRIOR PERIOD EXPENSES, ASSESSEE FAILED TO GIVE ANY SATISFACTORY REPLY TO THE AO. THE ASSESSEE ALSO FAILED TO SUBMIT ANY DOCUMENT ARY EVIDENCE JUSTIFYING THAT THE PRIOR PERIOD EXPENSES WERE CRYSTALLIZED DU RING THE YEAR UNDER CONSIDERATION. THE AO ACCORDINGLY, DISALLOWED PRIOR PERIOD EXPENSES AS CLAIMED BY ASSESSEE AND ADDED TO THE TOTAL INCOME O F ASSESSEE. 6. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHEREAS ASSESSEE SUBMITTED THAT PRIOR PERIOD EXPENSES REPRE SENTED THE ARREARS OF SALARY TO THE EMPLOYEES WHICH WAS CRYSTALLIZED IN T HE YEAR UNDER CONSIDERATION BY THE MINISTRY OF FINANCE, GOVT. OF INDIA IN ITS O FFICE MEMORANDUM PUBLISHED ON 31.08.2008 FOR PAY-SCALE REVISION WITH EFFECT FR OM 01.01.2006. THE ASSESSEE FURTHER SUBMITTED THAT LIABILITY FOR THE A RREARS OF SALARY TO THE STAFF WAS CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION AN D THEREFORE ELIGIBLE FOR DEDUCTION U/S 37(1) OF THE ACT. AFTER CONSIDERING T HE SUBMISSIONS OF ASSESSEE LD. CIT(A) DELETED THE ADDITION MADE BY AO OBSERVIN G AS UNDER:- 3.2 THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CON SIDERED AND IT IS SEEN THAT THE PRIOR PERIOD RELATED TO PAYMENTS OF S ALARY ARREARS CONSEQUENT TO THE OFFICE MEMORANDUM OF MINISTRY OF FINANCE, GOVERNMENT OF INDIA PUBLISHED ON 31.08.200. IT IS A LSO SEEN THAT THE AO ITA NO.1124/KOL/2014 A.Y. 2009-10 DCIT PORT BLAIR VS. ANIIDCO PAGE 3 HAS NOT DISPUTED THE FACT THAT THE LIABILITY HAD IN CURRED AND WAS AWARE THE SAME RELATED TO THE SIXTH PAY COMMISSION ARREAR . THEREFORE, HIS OBSERVATION THAT THE CLAIM THAT THESE LIABILITY AS CRYSTALLIZED CANNOT BE CONSIDERED AS JUSTIFIED. THEREFORE, CONSIDERING THE ABOVE SUBMISSION OF THE APPELLANT AND THE DECISION OF ITAT, DELHI IN UR BAN IMPROVEMENT CO. PVT. LTD. VS. ITO, WARD-18(2), NEW DELHI SUPRA , IT IS HELD THAT THE AO AS NOT JUSTIFIED IN DISALLOWING THE AMOUNT OF RS.87,44 ,195/- AND THE SAME IS DELETED . AGGRIEVED BY THIS, REVENUE HAS COME UP IN APPEAL BE FORE US ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS & CIRCUMSTANCES, THE CASE, TH E LD. CIT(A) IS NOT JUSTIFIED IN DELETING DISALLOWANCES OF RS.87,44,195 /- ON PRIOR PERIOD EXPENSES WITHOUT CONSIDERING THE FACT THAT THE ASSE SSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING AND THEREFORE, THE SAID EXPENSES ARE NOT ALLOWABLE EXPENDITURE U/S 41 OF THE IT ACT 1961 . THE LD. CIT(A) DID NOT ALSO EXAMINE THE FACT THAT THE PRIOR PERIOD EXP ENSES WHERE DULY CRYSTALLIZED DURING THE YEAR. 7. BEFORE US LD. AR REITERATED SUBMISSION AS MADE B EFORE LD. CIT(A) AND RELIED ON THE ORDER OF LD. CIT(A). 8. WE HAVE HEARD LD. AR AND PERUSED AND CAREFULLY C ONSIDERED THE MATERIALS AVAILABLE ON RECORD; INCLUDING THE JUDICI AL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. THE FACTS OF THE CASE AS BORN E OUT FROM THE RECORDS ARE THAT ASSESSEE HAS CLAIMED PRIOR PERIOD EXPENSES IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE FAILED TO FURNISH NECES SARY DETAILS BEFORE AO AT THE TIME OF ASSESSMENT PROCEEDINGS TO JUSTIFY THAT THIS EXPENSES WERE CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION. THERE FORE, AO DISALLOWED THE SAME, HOWEVER ASSESSEE BEFORE LD. CIT(A) SUBMITTED THE NECESSARY DETAILS WITH EVIDENCE AND DEMONSTRATED THAT THESE EXPENSES WERE CRYSTALLIZED IN THE YEAR UNDER CONSIDERATION. ACCORDINGLY, RELIEF WAS G RANTED BY LD. CIT(A) TO ASSESSEE. ADMITTEDLY, THE SALARY PERTAINING TO EARL IER YEAR WAS CLAIMED BY ASSESSEE IN THE YEAR UNDER CONSIDERATION BUT IT WAS CRYSTALLIZED IN THE CURRENT YEAR. PRIOR PERIOD ITEMS ARE INCOME OR EXPENSES WHI CH AROSE IN THE CURRENT PERIOD AS A RESULT OF ERRORS OR OMISSION IN PREPARA TION OF FINANCIAL STATEMENT OF ONE ARE MORE PRIOR PERIODS. ON EXAMINATION OF ORDER OF AUTHORITIES BELOW, WE ITA NO.1124/KOL/2014 A.Y. 2009-10 DCIT PORT BLAIR VS. ANIIDCO PAGE 4 FIND THAT THE AUTHORITIES BELOW HAS NOT DISPUTED GE NUINENESS OF SUCH EXPENSES. THE EXPENSE WAS DISALLOWED BY AO AS ASSES SEE FAILED TO PRODUCE NECESSARY DOCUMENTS TO JUSTIFY THAT THESE EXPENSES WERE CRYSTALLIZED IN THE CURRENT YEAR. HOWEVER, WE FIND THAT THERE WAS A REV ISION IN THE PAY SCALE WAS EFFECTED FROM 01.01.2006 AND OM WAS PUBLISHED ON 30 .08.2008. IN THE AFORESAID SITUATION, THE LIABILITY AROSE TO ASSESSE E FOR PAYMENT OF ARREARS SALARY. AS NOTIFICATION WAS ISSUED ON 30.08.2008 WH EREBY THE LIABILITY FOR THE PAYMENT OF ARREARS OF SALARY WAS CRYSTALLIZED , THE REFORE SUCH LIABILITY IS ELIGIBLE FOR DEDUCTION UNDER THE IT ACT. IN HOLDING SO, WE F IND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME-TAX V. HARYANA WAR EHOUSING CORPORATION (2017) 77 TAXMANN.COM 43 (P&H) WHERE IT WAS HELD AS UNDER:- 16. THE CONCLUDING PART OF THE MINUTES ADOPTED THE LET TER DATED 07.01.2009. THE MINUTES ALSO REFERRED TO THE ARREAR S. AS WE MENTIONED EARLIER, THE WORD 'ARREARS', ABSENT ANYTHING ELSE, INDICATES THAT THE LIABILITY HAD BEEN INCURRED AND HAD ALSO BEEN AGREE D TO BE DISCHARGED. THE LIABILITY, THUS, AROSE IN PRAESENTI AND NOT IN FUTURO. A PART OF THE LIABILITY WAS TO BE DISCHARGED IN FUTURE. THE ACCRU AL OF A LIABILITY AND THE TIME FOR THE DISCHARGE THEREOF ARE DIFFERENT MATTER S. IN THE MERCANTILE SYSTEM, THE MERE POSTPONEMENT OF THE DATE OF PAYMEN T OF A LIABILITY ALREADY INCURRED, ACKNOWLEDGED AND AGREED TO BE MET ARISES IN THE YEAR IT IS STATED TO BE SO INCURRED AND MET. 17. MR. GARG, THE LEARNED SENIOR COUNSEL APPEARING ON BEHALF OF THE ASSESSEE, RELIED UPON THE JUDGMENT OF THE SUPREME C OURT IN BHARAT EARTH MOVERS V. CIT [2000] 245 ITR 428/112 TAXMAN 6 1 , WHICH IS ALSO REFERRED TO BY THE TRIBUNAL. THE SUPREME COURT HELD : '4. THE LAW IS SETTLED: IF A BUSINESS LIABILITY HAS DEFINIT ELY ARISEN IN THE ACCOUNTING YEAR, THE DEDUCTION SHOULD BE ALLOWED AL THOUGH THE LIABILITY MAY HAVE TO BE QUANTIFIED AND DISCHARGED AT A FUTUR E DATE. WHAT SHOULD BE CERTAIN IS THE INCURRING OF THE LIABILIT Y. IT SHOULD ALSO BE CAPABLE OF BEING ESTIMATED WITH REASONABLE CERTAINT Y THOUGH THE ACTUAL QUANTIFICATION MAY NOT BE POSSIBLE. IF THESE REQUIR EMENTS ARE SATISFIED THE LIABILITY IS NOT A CONTINGENT ONE. THE LIABILIT Y IS IN PRAESENTI THOUGH IT WILL BE DISCH ARGED AT A FUTURE DATE. IT DOES NOT MAKE ANY DIFFER ENCE IF THE FUTURE DATE ON WHICH THE LIABILITY SHALL HAVE T O BE DISCHARGED IS NOT CERTAIN. 5. IN METAL BOX CO. OF INDIA LTD. V. WORKMEN [(1969) 73 ITR 53 : AIR 1969 SC 612] THE APPELLANT COMPANY ESTIMATED ITS LI ABILITY UNDER TWO ITA NO.1124/KOL/2014 A.Y. 2009-10 DCIT PORT BLAIR VS. ANIIDCO PAGE 5 GRATUITY SCHEMES FRAMED BY THE COMPANY AND THE AMOU NT OF LIABILITY WAS DEDUCTED FROM THE GROSS RECEIPTS IN THE P&L ACC OUNT. THE COMPANY HAD WORKED OUT ON AN ACTUAR IAL VALUATION ITS ESTIMATED LIABILITY AND MADE PROVISION FOR SUCH LIABILITY NOT ALL AT ONCE BUT SPREAD OVER A NUMBER OF YEARS. THE PRACTICE FOLLOWED BY TH E COMPANY WAS THAT EVERY YEAR THE COMPANY WORKED OUT THE ADDITION AL LIABILITY INCURRED BY IT ON THE EM PLOYEES PUTTING IN EVERY ADDITIONAL YEAR OF SERVICE. THE GRATUITY WAS PAYABLE ON THE TERMINATIO N OF AN EMPLOYEE'S SERVICE EITHER DUE TO RETIREMENT, DEATH OR TERMINAT ION OF SERVICE THE EXACT TIME OF OCCURRENCE OF THE LATTER TWO EVENTS B EING NOT DETERMINAB LE WITH EXACTITUDE BEFOREHAND. A FEW PRINCIPLES WER E LAID DOWN BY THIS COURT, THE RELEVANT OF WHICH FOR OUR P URPOSE ARE EXTRACTED AND REPRODUCED AS UNDER: (I) FOR AN ASSESSEE MAINTAINING HIS ACCOUNTS ON MERCANT ILE SYSTEM, A LIABILITY ALREADY ACCRUED, T HOUGH TO BE DISCHARGED AT A FUTURE DATE, WOULD BE A PROPER DEDUCTION WHILE WO RKING OUT THE PROFITS AND GAINS OF HIS BUSINESS, REGARD BEING HAD TO THE ACCEPTED PRINCIPLES OF COMMERCIAL PRACTICE AND ACCO UNTANCY. IT IS NOT AS IF SUCH DEDUCTION IS PERMISSIBLE ONLY IN CASE OF AMOUNTS ACTUALLY EXPENDED OR PAID; (II) JUST AS RECEIPTS, THOUGH NOT ACTUAL RECEIPTS BUT AC CRUED DUE ARE BROUGHT IN FOR INCOME TAX ASSESSMENT, SO ALSO LIABI LITIES ACCRUED DUE WOULD BE TAKEN INTO ACCOUNT WHILE WORKI NG OUT THE PROFITS AND GAINS OF THE BUSINESS; (III) A CONDITION SUBSEQUENT, THE FULFILLMENT OF WHICH MA Y RESULT IN THE REDUCTION OR EVEN EXTINCTION OF THE LIABILITY, WOULD NOT HAVE THE EFFECT OF CONVERTING THAT LIABILITY INTO A CONT INGENT LIABILITY; AND (IV) A TRADER COMPU TING HIS TAXABLE PROFITS FOR A PARTICULAR YEAR MAY PROPERLY DEDUCT NOT ONLY THE PAYMENTS ACTUALLY MADE TO HIS EMPLOYEES BUT ALSO THE PRESENT VALUE OF ANY PAYMENT S IN RESPECT OF THEIR SERVICES IN THAT YEAR TO BE MADE I N A SUBSEQUENT YEAR IF IT CAN BE SATISFACTORILY ESTIMAT ED. 6. SO IS THE VIEW TAKEN IN CALCUTTA CO. LTD. V. CIT [ (1959) 37 ITR 1 : AIR 1959 SC 1165 ] WHEREIN THIS COURT HAS HELD THAT THE LIABILITY ON THE ASSESSEE HAVING BEEN IMPORTED, THE LIABILITY WOULD BE AN ACCRUED LIABILITY AND WOULD NOT CONVERT INTO A CONDITIONAL ONE MERELY BECAUSE THE LIABILITY WAS TO BE DISCHARGED AT A FUTURE DATE . THERE MAY BE SOME DIFFICULTY IN THE ESTIMATION THEREOF BUT THAT WOUL D NOT CONVERT THE ACCRUED LIABILITY INTO A CONDITIONAL ONE; IT WAS AL WAYS OPEN TO THE TAX AUTHORITIES CONCERNED TO ARRIVE AT A PROPER ESTIMAT E OF THE LIABILITY HAVING REGARD TO ALL THE CIRCUMSTANCES OF THE CASE. ' ITA NO.1124/KOL/2014 A.Y. 2009-10 DCIT PORT BLAIR VS. ANIIDCO PAGE 6 18. THE LIABILITY, IN THE CASE BEFORE US, AROSE IN THE ASSESSMENT YEAR 2009-10. SIXTY PERCENT OF IT WAS LIABLE TO BE DISCH ARGED IN THE NEXT ASSESSMENT YEAR. IT IS, UNDOUBTEDLY, ESTIMATED WITH MORE THAN JUST REASONABLE CERTAINTY. THE LIABILITY WAS, THEREFORE, NOT A CONTINGENT ONE BUT ONE IN PRAESENTI. A PART OF IT WAS TO BE DISCHA RGED AT A FUTURE DATE. THE JUDGMENT SUPPORTS THE ASSESSEE'S CASE. FROM THE ABOVE JUDGMENT, WE FIND THAT THE FACTS OF THE ASSESSEE ARE EXACTLY IDENTICAL TO THE FACTS OF ABOVE CASE LAW, THEREFORE , WE FIND NO REASON TO INTERFERE WITH THE FINDINGS ARRIVED BY THE LD. CIT( A). UNDER THE CIRCUMSTANCES, THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 9. NEXT ISSUE RAISED BY REVENUE IN THIS APPEAL IS T HAT LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE FOR 2,13,878/- ON ACCOUNT OF EXPENSES INCURRED TOWARDS SOCIAL SERVICE. 10. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HA S INCURRED EXPENSES FOR SOCIAL SERVICE AND THIS EXPENSE WAS INCURRED FO R THE SUPPLY OF MILK FOR SGFI FOOTBALL TOURNAMENT AND FOOTBALL TEAM AND MEME NTOES ETC., THE ASSESSEE FAILED TO PRODUCE THE NECESSARY DETAILS IN SUPPORT OF SUCH EXPENSE INCURRED BY ASSESSEE AT THE TIME OF ASSESSMENT PROC EEDINGS. THE AO ALSO OBSERVED THAT THIS EXPENSE WAS NOT CONNECTED WITH T HE BUSINESS OF ASSESSEE. ACCORDINGLY, AO DISALLOWED THE EXPENSE TO 2,13,878/- AND ADDED TO THE TOTAL INCOME OF ASSESSEE. 11. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHEREAS ASSESSEE SUBMITTED THAT ALL THE EXPENSES WERE GENUI NELY INCURRED AND ALL THE SUPPORTING EVIDENCES WERE DULY MADE AVAILABLE AT TH E TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSEE FURTHER SUBMITTED THAT TH ESE EXPENSES WERE INCURRED FOR THE PROMOTION OF ITS BUSINESS AND THER EFORE ELIGIBLE FOR DEDUCTION UNDER THE IT ACT. AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE LD. CIT(A) DELETED THE ADDITION MADE BY AO BY OBSERVING AS UND ER:- THEREFORE, CONSIDERING THE ABOVE AND THE FACT THAT THE EXPENSES ARE DULY VOUCHED FOR, IT IS HELD THAT THE SAME ARE ALLO WABLE AS RELATING TO THE BUSINESS PURPOSES ACCORDINGLY, THE ADDITION MADE BY THE AO IS DELETED. ITA NO.1124/KOL/2014 A.Y. 2009-10 DCIT PORT BLAIR VS. ANIIDCO PAGE 7 AGGRIEVED BY THIS, REVENUE HAS COME UP IN APPEAL BE FORE US ON THE FOLLOWING GROUNDS:- 2.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE DISALLOWANC ES OF RS.2,13,878/- INCURRED TOWARDS SOCIAL SERVICE, WHICH WERE NOT REL ATED TO THE BUSINESS ACTIVITY OF THE ASSESSEE. 12. BEFORE US LD. AR FOR THE ASSESSEE REITERATED SA ME SUBMISSION AS MADE BEFORE LD. CIT(A) AND HE RELIED ON THE ORDER OF LD. CIT(A). 13. WE HAVE HEARD LD. AR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ISSUE IN THE INSTANT CASE, RELATES TO THE DISALLOWA NCE OF EXPENSE INCURRED BY ASSESSEE ON ACCOUNT OF TWO REASONS FIRSTLY, NECE SSARY DETAILS WERE NOT SUBMITTED AT THE TIME OF ASSESSMENT PROCEEDINGS AND SECONDLY THE EXPENSE INCURRED BY ASSESSEE WERE NOT CONNECTED WITH THE BU SINESS OF ASSESSEE. HOWEVER, LD. CIT(A) OBSERVED THAT EXPENSE WERE INCU RRED BY ASSESSEE FOR THE PROMOTION OF ASSESSEES BUSINESS AND ACCORDINGL Y LD. CIT(A) GRANTED RELIEF TO ASSESSEE. ADMITTEDLY, WE FIND THAT ASSESS EE IS 100% GOVERNMENT OWNED COMPANY AND ENGAGED IN PROCURING BUSINESS OF MILK. THE EXPENSE HAS BEEN INCURRED BY ASSESSEE UNDER THE HEAD MILK. TH EREFORE, IT CAN BE ESTABLISHED THAT THE EXPENSE INCURRED BY ASSESSEE W ERE DIRECTLY CONNECTED WITH THE BUSINESS OF ASSESSEE. WE ALSO FIND THAT NO W-A-DAYS IT IS VERY COMMON FOR THE CORPORATE TO SPONSOR SPORTS ACTIVITI ES FOR THE PURPOSE OF ADVERTISEMENT OF THEIR PRODUCTS. THEREFORE, IT CANN OT BE CONCLUDED THAT EXPENSES WERE NOT INCURRED IN CONNECTION WITH BUSIN ESS OF ASSESSEE. WE FURTHER ALSO FIND GENUINENESS OF EXPENSE HAS NOT BE EN DOUBTED BY AO. IN SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, HON'BL E DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI CLOTH & GENERAL MILLS CO. REPORTED IN 240 ITR 9 (DEL) HAS ALLOWED THE INSTANT ISSUE IN FAVOUR OF ASSESSEE . THE RELEVANT EXTRACT OF THE JUDGMENT IS REPRODUCED BELOW:- BUSINESS EXPENDITUREALLOWABILITYEXPENDITURE ON O RGANISING A FOOTBALL TOURNAMENTALLOWABLE AS DEDUCTION.DELHI C LOTH & GENERAL MILLS CO. LTD. VS. CIT (1992) 198 ITR 500 (DEL) : TC 17R.1113 FOLLOWED ITA NO.1124/KOL/2014 A.Y. 2009-10 DCIT PORT BLAIR VS. ANIIDCO PAGE 8 EXPENDITURE INCURRED BY ASSESSEE-COMPANY ON ORGANIS ING A FOOTBALL TOURNAMENT IS ALLOWABLE AS DEDUCTION. FROM THE ABOVE, JUDGMENT, WE FIND THAT THE EXPENSE INCURRED ON THE SPONSORSHIP OF SPORTS EVENT HAS BEEN HELD AS BUSINE SS EXPENSE. RESPECTFULLY FOLLOWING THE SAME PRINCIPLE WE FIND NO INFIRMITY I N THE ORDER OF LD. CIT(A). HENCE, THIS GROUND OF REVENUE IS DISMISSED. 14. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 08/ 02/2017 SD/- SD/- ( !') (!') (ABY.T.VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S $!% &- 08 / 02 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, PORT BLAIR, M.B. 210, SHADIPUR POR T BLAIR, A& NI-744106 2. /RESPONDENT-ANDAMAN NICOBAR ISLAND INTEGRATED DEVEL OPMENT CORPORATION LTD. 143/1/1, COTTON STREET, KOLKATA-700 007 3.%%/01 1 2 / CONCERNED CIT KOLKATA 4. 1 1 2- / CIT (A) KOLKATA 5.567 /0, 1 /0 , / DR, ITAT, KOLKATA 6.7:;<= / GUARD FILE. BY ORDER/ 1!, /TRUE COPY/ / % 1 /0 ,