Rossell India Limited (earlier known as Rossell Tea Limited), Kolkata V. DCIT, Circle - 4, Kolkata, Kolkata

ITA 211/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1199 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SAURABH KEDIA
• Keywords: Business expenditure
• Section: 37(1); 37

Judgement Text

1 ITA NOS.210 TO 212/KOL/2016 ROSSELL INDIA LTD.., AYS 2010-11 TO 2012-13 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE .., /AND , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI WASEEM AHMED, AM] I.T.A. NOS. 210 TO 212/KOL/2016 ASSESSMENT YEARS: 2010-11 TO 2012-13 ROSSELL INDIA LIMITED (PAN: AABCR3736J) VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-4, KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 12.10.2017 DATE OF PRONOUNCEMENT 03.11.2017 FOR THE APPELLANT SHRI SAURABH KEDIA, AR FOR THE RESPONDENT SHRI SALLONG YADEN, ADDL. CIT, D R ORDER PER SHRI A.T.VARKEY, JM ALL THESE APPEALS FILED BY THE ASSESSEE ARE AGAINST THE ORDERS OF LD. CIT(A)-2, KOLKATA DATED 26.11.2015 FOR AY 2010-11 AND 2011-12 ; AND AGAINST THE ORDER DATED 01.01.2016 FOR AY 2012-13. 2. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE PRESSED ONLY GROUND NO. 1 OF APPEAL FOR AY 2010-11. HENCE, WE DI SMISS ALL OTHER GROUNDS OF APPEALS OF THE ASSESSEE EXCEPT GROUND NO. 1 OF APPEAL FOR AY 2 010-11. GROUND NO. 1 OF APPEAL OF ASSESSEE FOR AY 2010-11 READS AS UNDER: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER IN RESPECT OF CLUB EXPENSES AMOUNTING TO RS.2,77,052/- AS EXPENDITURE INCURRED FOR NON-BUSINESS PURPOSES. 3. BRIEFLY STATED FACTS ARE THAT GROUND NO. 1 RELAT ES TO DISALLOWANCE OF CLUB EXPENSES. THE AO BASED ON DISCLOSURE MADE IN TAX AUDIT REPORT DISALLOWED EXPENDITURE AMOUNTING TO RS.50,738/-, RS.1,54,299/- AND RS. 72,015 AS INC URRED TOWARDS ENTRANCE FEES, SUBSCRIPTION AND CLUB FACILITIES RESPECTIVELY U/S. 37 OF THE INC OME-TAX ACT, 1961 (HEREINAFTER REFERRED TO 2 ITA NOS.210 TO 212/KOL/2016 ROSSELL INDIA LTD.., AYS 2010-11 TO 2012-13 AS THE ACT) AS EXPENDITURE INCURRED FOR NON-BUSIN ESS PURPOSES. ON APPEAL, LD. CIT(A) CONFIRMED THE ACTION OF AO. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. UNITED GLASS MFG. CO. LTD. (2012-TIOL-1-2-SC-IT). ON THE OTHER HAND, THE LD. DR VEHEMENTLY RELIED ON THE ORD ERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNITED GLASS MFG. CO. LTD.(SUPRA), WHEREIN THE HON BLE SUPREME COURT HAS HELD THAT CLUB MEMBERSHIP FEES/EXPENSES FOR EMPLOYEES INCURRED BY THE ASSESSEE IS A PURE BUSINESS EXPENSES U/S. 37(1) OF THE ACT. AND WE NOTE THAT T HE AO ONLY IN THIS ASSESSMENT YEAR HAS DISALLOWED THE CLAIM. WE NOTE THAT IN THE PREVIOUS ASSESSMENT YEARS AND SUBSEQUENT ASSESSMENT YEARS, NO DISALLOWANCE OF CLUB EXPENDITU RE WAS MADE BY THE AO, SO THE DEPARTMENT OUGHT TO HAVE FOLLOWED THE RULE OF CONSI STENCY. MOREOVER, WHEN THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE HONBLE SUPREME COURT (SUPRA) AND THE LD. DR WAS UNABLE TO PRODUCE ANY MA TERIAL TO DISTINGUISH THE CASE LAW BEFORE US, FOLLOWING THE AFORESAID BINDING PRECEDEN T OF THE HONBLE SUPREME COURT, CITED SUPRA, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESS EE. 5. COMING TO APPEALS PREFERRED FOR AYS. 2011-12 AND 2012-13 THE LD. COUNSEL DID NOT PRESS THE GROUND OF APPEAL, SO THESE APPEALS STAND DISMISSED. 6. IN THE RESULT, APPEAL OF ASSESSEE FOR AY 2010-11 IS ALLOWED AND APPEAL OF ASSESSEE FOR AYS. 2011-12 AND 2012-13 STANDS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 3RD NOV EMBER, 2017. SD/- SD/- (WASEEM AHMED) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 3RD NOVEMBER, 2017 JD.(SR.P.S.) 3 ITA NOS.210 TO 212/KOL/2016 ROSSELL INDIA LTD.., AYS 2010-11 TO 2012-13 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ROSSELL INDIA LIMITED, (EARLIER KNOW N AS ROSSELL TEA LIMITED), 21/1A/3, DARGA ROAD, JINDAL TOWERS, BLOCK -B, 4 TH FLOOR, PARK CIRCUS, KOLKATA-700 017 2 RESPONDENT DCIT, CIRCLE-4, KOLKATA. 3. THE CIT(A) , KOLKATA. 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KO LKATA / TRUE COPY, BY ORDER, SR. PVT. SECRETARY