ACIT, Pune V. M/s Alfa Laval ( I ) Ltd., Pune

ITA 2442/PUN/2012

• Counselvise Citation: 244224514 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-04-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 11-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Earning of tax free income; Fair market value
• Section: 143(3); 50C; 14A; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.2300/PN/2012 (ASSESSMENT YEAR : 2005-06) ALFA LAVAL (INDIA) LTD., BOMBAY PUNE ROAD, DAPODI, PUNE 411 012. PAN : AAACA5899A . APPELLANT VS. ADDL. COMMISSIONER OF INCOME TAX, RANGE- 8, PUNE. . RESPONDENT ITA NO.2442/PN/2012 (ASSESSMENT YEAR : 2005-06) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE- 8, PUNE. . APPELLANT VS. M/S ALFA LAVAL (INDIA) LTD., MUMBAI-PUNE ROAD, DAPODI, PUNE 411 012. PAN : AAACA5899A . RESPONDENT ASSESSEE BY : MR. SUNIL PATHAK DEPARTMENT BY : MR. B. C. MALAKAR DATE OF HEARING : 19-01-2015 DATE OF PRONOUNCEMENT : 18-03-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED ARE CROSS-APPEALS, EACH BY THE ASSESS EE AND THE REVENUE, PERTAINING TO THE ASSESSMENT YEAR 2005-06, WHICH WERE HEARD TOGETHER AND ARE BEING DISPOSED-OFF BY WAY OF A CON SOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE CAPTIONED CROSS-APPEALS ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, PUNE DATED 17.09.2012 WHICH, IN ITA NO.2300/PN/2012 ITA NO.2442/PN/2012 TURN, HAS ARISEN FROM AN ORDER DATED 30.12.2008 PAS SED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 3. IN THE APPEAL OF THE ASSESSEE, GROUNDS OF APPEAL RAISED READ AS UNDER :- 1.1 THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADDI TION OF RS.1,56,03,500/- BY APPLYING THE PROVISIONS OF SECTION 50C OF THE IN COME TAX ACT, 1961 WITHOUT APPRECIATING THAT THE APPELLANT COMPANY HAD SOLD A DEPRECIABLE ASSET WHEREIN THE CAPITAL GAINS IS COMPUTED U/S. 50 AND AS THE PR OVISIONS OF SECTION 50C WERE NOT APPLICABLE TO DEPRECIABLE ASSETS, THE ADDI TION OF RS.1,56,03,500/- MADE BY APPLYING THE PROVISIONS OF SECTION 50C IS N OT JUSTIFIED AT ALL. 1.2 WITHOUT PREJUDICE TO GROUND NO 1.1, THE ASSESSE E SUBMITS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION MAD E OF RS.1,56,03,500/- WITHOUT APPRECIATING THAT THE FAIR MARKET VALUE OF THE ASSET SOLD WAS LESS THAN THE STAMP DUTY VALUATION AND HENCE, THERE WAS NO REASON TO MAKE ANY ADDITION U/S. 50C. 1.3 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE SALE CONSIDERATION RECEIVED BY THE APPELLANT CO MPANY WAS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER AND THAT NO CASH TRANSACTION WAS INVOLVED AND THE FAIR MARKE T VALUE DETERMINED BY THE DVO WAS NOT CORRECT. THE BUILDING IN WHICH THE OFFICE WAS LOCATED WAS CO NSTRUCTED MUCH PRIOR TO YEAR 1954. THE CONDITION OF THE OFFICE AT THE TIME THE APPELLA NT COMPANY SOLD THE SAID OFFICE WAS NOT GOOD, ESPECIALLY THE B ASEMENT PART WHICH USED TO HAVE A LOT OF WATER CLOGGING DURING M ONSOON. THE DESCRIPTION OF THE PRESENT CONDITION PROVIDED BY TH E LEARNED DVO OF THE BASEMENT IS DUE TO THE REFURBISHMENT AND REN OVATION WORK CARRIED OUT BY THE SUBSEQUENT BUYERS. 2.1 THE LEARNED CIT(A) ERRED IN CONFIRMING AN AD HO C DISALLOWANCE TO THE EXTENT OF RS.75,000/- U/S. 14A OF THE INCOME TAX AC T, 1961. 2.2 HE ERRED IN NOT APPRECIATING THAT THE INVESTMEN TS (ON WHICH THE DIVIDEND WAS RECEIVED) WERE MADE OUT OF OWNED FUNDS OF THE COMPANY AND THAT NO PORTION OF SALARY PAID TO STAFF AND OTHER E XPENSES WERE INCURRED IN RELATION TO EXEMPT DIVIDEND. 2.3 HE ERRED IN NOT FOLLOWING THE DECISION OF MUMBA I HIGH COURT IN THE CASE OF CIT V GENERAL INSURANCE CORPORATION OF INDI A (NO.1) (2002) 254 ITR 203 (MUM.). 3. THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADHOC DISALLOWANCE OF VEHICLE EXPENSES TO THE EXTENT OF RS.3,00,000/- OUT OF TOTAL VEHICLE EXPENSES OF RS.1,19,22,863/- ON THE GROUND THAT THE SAME ARE NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADHOC DISALLOWANCE OF RS.10,57,860/- OUT OF MISCELLANEOUS EXPENSES ON THE GROUND THAT EXPENDITURE TO ABOVE EXTENT IS INCURRED FOR NON BUSINESS PURPOS ES WITHOUT APPRECIATING ITA NO.2300/PN/2012 ITA NO.2442/PN/2012 THAT THE SAID EXPENDITURE WAS INCURRED WHOLLY AND E XCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE COMPANY. 5. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWA NCE OF COST OF CLUB SERVICES OF RS.98,816/- U/S. 37(1) OF THE INCOME TA X ACT, 1961. 6. THE LEARNED CIT(A) ERRED IN CONFIRMING AN ADHOC DISALLOWANCE OF RS.3,17,240/- (BEING 0.2% OF WORKMAN & STAFF WELFAR E EXPENSES, SALES PROMOTION EXPENSES, ADVERTISEMENT EXPENSES AND TRAV ELLING EXPENSES IN ALL AGGREGATING TO RS.15,86,19,829/-) TO COVER THE LEAK AGE OF REVENUE. 4. IN SO FAR AS THE GROUND OF APPEAL NOS.1.1 TO 1.3 IS CONCERNED, IT RELATES TO AN ADDITION OF RS.1,56,03,500/- MADE BY THE ASSE SSING OFFICER BY APPLYING SECTION 50C OF THE ACT. 5. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE W AS OWNING TWO OFFICE UNITS IN MUSTAFA BUILDING, PHIROZSHAH MEHTA ROAD, FORT, M UMBAI, WHICH WERE SOLD DURING THE YEAR UNDER CONSIDERATION FOR A TOTAL CON SIDERATION OF RS.3,50,00,000/- IN TERMS OF A DEED OF APARTMENT RE GISTERED ON 23.12.2004. THE ASSESSING OFFICER NOTED THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN RESPECT OF THE DEED EXECUTED ON 23.12.2004 WAS RS.5,06,03,500/-, WHICH WAS MORE THAN THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE. THE REFORE, HE SHOW-CAUSED THE ASSESSEE AS TO WHY THE VALUE SO CONSIDERED BY T HE STAMP VALUATION AUTHORITY BE NOT CONSIDERED AS FULL VALUE OF CONSID ERATION FOR THE PURPOSES OF COMPUTING CAPITAL GAIN ON SALE OF THE PROPERTY ON T HE STRENGTH OF THE PROVISIONS OF SECTION 50C OF THE ACT. ASSESSEE SUBMITTED BEFO RE THE ASSESSING OFFICER THAT THE SAID BUILDING WAS AN OLD BUILDING CONSTRUC TED IN 1954 AND THE TENEMENTS WERE NOT IN GOOD CONDITION AND THEREFORE THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSES OF P AYMENT OF STAMP DUTY WAS IN EXCESS OF THE FAIR MARKET VALUE OF THE PROPERTY. THE ASSESSING OFFICER, HAVING REGARD TO THE PROVISIONS OF SUB-SECTION (2) OF SECTION 50C OF THE ACT REFERRED THE VALUATION OF THE PROPERTY TO THE DEPAR TMENTAL VALUATION OFFICER (DVO), WHO HAS DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY AT RS.6,56,24,654/-. OSTENSIBLY, THE FAIR MARKET VALU E DETERMINED BY THE DVO ITA NO.2300/PN/2012 ITA NO.2442/PN/2012 WAS HIGHER THAN THE VALUE ADOPTED BY THE STAMP VALU ATION AUTHORITY AND THEREFORE IN TERMS OF SUB-SECTION (3) OF SECTION 50 C OF THE ACT, THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PU RPOSES OF PAYMENT OF STAMP DUTY IS TO BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER FOR THE PURPOSES O F COMPUTING CAPITAL GAINS. AS A CONSEQUENCE, THE CIT(A) HAS ALSO AFFIRMED THE ACT ION OF THE ASSESSING OFFICER IN ADOPTING OF RS.5,06,06,500/- AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF COMPUTING CAPITAL GAIN ON THE TRANSFER OF THE IMPUGNED PROPERTY IN TERMS OF SECTION 50C OF THE ACT. 6. AGAINST THE AFORESAID, PLEA OF THE LD. REPRESENT ATIVE FOR THE ASSESSEE IS THAT WHAT THE ASSESSEE HAD SOLD WAS A DEPRECIABL E ASSET WHEREIN CAPITAL GAINS IS COMPUTED IN TERMS OF SECTION 50 OF THE ACT AND THEREFORE, IN SUCH SITUATIONS, THE DEEMING PROVISIONS CONTAINED IN SEC TION 50C OF THE ACT WERE NOT APPLICABLE. THOUGH THE LD. REPRESENTATIVE HAS RAISED THE AFORESAID ARGUMENT BUT HE FAIRLY CONCEDED THAT THIS ASPECT OF THE MATTER HAS BEEN ADJUDICATED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. UNITED MARINE ACADEMY (2011) 130 ITD 113 (MUM) (SB) AGAINS T THE STAND OF THE ASSESSEE. THUS, FOLLOWING THE DECISION OF THE SPEC IAL BENCH OF THE TRIBUNAL IN THE CASE OF UNITED MARINE ACADEMY (SUPRA), THE SAID ASPECT IS DECIDED AGAINST THE ASSESSEE. 7. ALTERNATIVELY, IT HAS ALSO BEEN POINTED OUT THAT THE ADOPTION OF RS.5,06,03,500/- AS THE FULL VALUE OF THE CONSIDERA TION IS NOT JUSTIFIED BECAUSE IT CORRESPONDED TO THE DATE ON WHICH THE DEED OF APART MENT IS REGISTERED I.E. ON 23.12.2004 WHEREAS THE ASSESSEE HAD ENTERED INTO A MEMORANDUM OF UNDERSTANDING (MOU) FOR SALE OF THE PROPERTY ON 20. 04.2004 ITSELF, WHEREIN THE CONSIDERATION OF RS.3,50,00,000/- WAS ALSO FINALIZE D. IN THIS CONTEXT, REFERENCE HAS BEEN MADE TO THE COPY OF THE MOU DATED 20.04.20 04 FILED IN THE PAPER BOOK AT PAGES 1 TO 10. THE LD. REPRESENTATIVE POIN TED OUT THAT AT THE TIME OF ITA NO.2300/PN/2012 ITA NO.2442/PN/2012 ENTERING OF THE MOU ON 20.04.2004 NOT ONLY THE FINA L CONSIDERATION WAS AGREED UPON BUT ADVANCE WAS ALSO RECEIVED WHICH HAS BEEN DULY NOTED IN THE FINAL DEED OF APARTMENT EXECUTED ON 23.12.2004. HE , THEREFORE, SUBMITTED THAT IF AT ALL THE PROVISIONS OF SECTION 50C ARE TO BE APPLIED AND THE VALUE ASSESSABLE BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSES OF STAMP DUTY IS TO BE ADOPTED AS THE CONSIDERATION FOR THE PURPOSES OF COMPUTING CAPITAL GAIN, IT SHOULD BE DONE WITH REFERENCE TO THE VALUE AS ON 20.04.2004. 8. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE APPEARING FOR THE REVENUE CONTENDED THAT THE VALUE ADOPTED FOR TH E PURPOSES OF PAYMENT OF STAMP DUTY AS ON THE DATE OF TRANSFER SHOULD BE ADO PTED FOR THE PURPOSES OF SECTION 50C OF THE ACT, WHICH IN THE PRESENT CASE I S 23.12.2004. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. ON THIS ASPECT, WE FIND THAT THE SAID PLEA HAS BEEN RAISED BY THE ASSE SSEE BEFORE US, AND IT WAS NOT RAISED BEFORE THE LOWER AUTHORITIES. WE DEEM I T FIT AND PROPER TO REMAND THIS ASPECT BACK TO THE FILE OF THE ASSESSING OFFIC ER, WHO SHALL EXAMINE THE SAME IN ACCORDANCE WITH LAW. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE AN OPPORTUNITY OF BEING HEARD BE FORE PASSING AN ORDER AFRESH ON THIS ASPECT. THUS, ON THIS ASPECT ASSESS EE PARTLY SUCCEEDS FOR STATISTICAL PURPOSES. 10. THE GROUNDS OF APPEAL NOS.2.1 TO 2.3 RAISED BY THE ASSESSEE RELATE TO A DISALLOWANCE OF RS.75,000/- SUSTAINED BY THE CIT( A) IN TERMS OF SECTION 14A OF THE ACT. ON THIS ASPECT, THE FACTS ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTED THAT ASSESSEE HAD EARNED CERTAIN INCOMES BY WAY OF DIVIDEND FROM MUTUAL FUNDS, ETC. WHICH WAS EXEMPT FROM TAX. HE, THEREFORE, INVOKED SECTION 14A OF THE ACT AND DISALLOWED 10% OF THE TOTAL EXEMPT INCOME, I.E. RS.20,41,929/- AS AN ESTI MATED EXPENDITURE INCURRED FOR EARNING SUCH EXEMPT INCOME. ACCORDINGLY, THE A SSESSING OFFICER ITA NO.2300/PN/2012 ITA NO.2442/PN/2012 DISALLOWED A SUM OF RS.20,41,929/- ON THIS ASPECT. THE CIT(A) NOTED THAT IN THE PAST YEARS, IN ASSESSEES OWN CASE ONLY AN AD- HOC DISALLOWANCE OF RS.75,000/- WAS RETAINED ON THIS COUNT AND FOLLOWIN G THE PRECEDENT, THE CIT(A) RETAINED THE DISALLOWANCE U/S 14A OF THE ACT TO THE EXTENT OF RS.75,000/- AND DELETED THE BALANCE. ASSESSEE IS IN APPEAL CHALLEN GING THE SUSTENANCE OF ADDITION TO THE EXTENT OF 75,000/- WHEREAS THE REVE NUE IN ITS CROSS-APPEAL HAS ASSAILED THE ACTION OF THE CIT(A) IN ALLOWING PART RELIEF TO THE ASSESSEE. SINCE THE TWO CROSS-GROUNDS INVOLVE SAME ISSUE, THEY ARE BEING TAKEN-UP TOGETHER. 11. ON THIS ASPECT, IT WAS A COMMON GROUND BETWEEN THE PARTIES THAT THE SIMILAR DISALLOWANCE RETAINED BY THE CIT(A) IN ASSE SSMENT YEAR 2004-05 WAS NOT CHALLENGED BY THE DEPARTMENT BEFORE THE TRIBUNA L AND THEREFORE THE SAID DECISION HAD BECOME FINAL. THE LD. REPRESENTATIVE ALSO POINTED OUT THAT EVEN ASSESSEE HAD NOT CHALLENGED THE DECISION OF THE CIT (A) BEFORE THE TRIBUNAL FOR ASSESSMENT YEAR 2004-05 IN SUSTAINING THE DISALLOWA NCE OF RS.75,000/-. IT WAS THEREFORE SUBMITTED BY THE RIVAL PARTIES THAT T HE MATTER BE DECIDED IN THE LIGHT OF THE AFORESAID PRECEDENT. 12. IN VIEW OF THE AFORESAID FACTUAL MATRIX, WE DEE M IT FIT AND PROPER TO AFFIRM THE ORDER OF THE CIT(A) ON THIS ASPECT AND A CCORDINGLY THE GROUNDS OF APPEAL NO.2.1 TO 2.3 OF THE ASSESSEE AND THE CROSS- GROUND RAISED BY THE REVENUE IN ITS APPEAL ARE DISMISSED. 13. GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS WITH REGARD TO AN AD- HOC DISALLOWANCE OF RS.3,00,000/- SUSTAINED BY THE CIT(A) OUT OF THE VEHICLE EXPENSES. IN THIS CONTEXT, BRIEF FACTS ARE THAT IN THE YEAR UNDER CONSIDERATION, ASSESSEE HAD INCURRED OF TOTAL EXPENDITURE ON VEHIC LES AT RS.1.19 CRORES OUT OF WHICH THE ASSESSING OFFICER MADE AN AD-HOC DISALLOW ANCE OF RS.5,96,000/- ON THE GROUND THAT THE EXPENSES WERE NOT INCURRED WHOL LY OR EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. THE CIT(A) HAS DELETED A SUM OF RS.2,96,000/- AND ITA NO.2300/PN/2012 ITA NO.2442/PN/2012 RETAINED A DISALLOWANCE OF RS.3,00,000/- ON AN AD-H OC BASIS. IN COMING TO SUCH CONCLUSION, THE CIT(A) FOLLOWED THE ORDER OF H IS PREDECESSOR IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 . AT THE TIME OF HEARING BEFORE US, IT WAS SUBMITTED BY THE LD. REPRESENTATI VE THAT IN ASSESSMENT YEARS 2003-04 AND 2004-05, THE TRIBUNAL IN ASSESSEE S OWN CASE VIDE ITA NOS.1005/PN/2007 AND 88/PN/2008 RESPECTIVELY DATED 30.06.2011 HAS SET- ASIDE THE ISSUE BACK TO THE FILE OF THE ASSESSING O FFICER FOR FRESH VERIFICATION. FOLLOWING THE AFORESAID PRECEDENT, WHICH IS NOT DIS PUTED BY THE LD. DEPARTMENTAL REPRESENTATIVE, ON THIS ASPECT WE REST ORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE IT AFRESH I N THE LIGHT OF THE DIRECTION OF THE TRIBUNAL CONTAINED IN ORDER DATED 30.06.2011 (SUPRA ). THUS, ON THIS ASPECT, ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 14. BY WAY OF GROUND OF APPEAL NO.4, ASSESSEE HAS C HALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING AN AD-HOC DISALLOWANCE OF RS.10,57,860/- MADE OUT OF MISCELLANEOUS EXPENSES. IN THIS CONTEXT, RELEVA NT FACTS ARE THAT DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE WAS FOUND TO HAVE INCURRED VARIOUS EXPENSES LIKE SALES PROMOTION EXPENSES, CONFERENCE EXPENSES, ADVERTISEMENT EXPENSES, ETC. WHICH WAS GROUPED UNDE R THE HEAD MISCELLANEOUS EXPENSES. THE TOTAL OF SUCH EXPEND ITURE WAS A SUM OF RS.10,57,86,072/- AND THE ASSESSING OFFICER ON AN A D-HOC BASIS DISALLOWED 1% OF THE SAME ON THE GROUND THAT IT WAS NOT INCURR ED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. THE DISALLOWANCE SO MADE CAME TO RS.10,57,860/-. THE CIT(A) HAS ALSO SUSTAINED THE DISALLOWANCE, AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 15. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT SIMILAR ISSUE CAME BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04 AND 2004-05 WHEREIN THE TR IBUNAL VIDE ITS ORDER DATED 30.06.2011 (SUPRA) HAS SET-ASIDE THE MATTER B ACK TO THE FILE OF THE ITA NO.2300/PN/2012 ITA NO.2442/PN/2012 ASSESSING OFFICER FOR FRESH VERIFICATION. FOLLOWIN G THE AFORESAID PRECEDENT, WHICH CONTINUES TO HOLD THE FIELD AND HAS NOT BEEN DISPUTED BY THE LD. DEPARTMENTAL REPRESENTATIVE, WE SET-ASIDE THE IMPUG NED ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSE SSING OFFICER WHO SHALL DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DIRECTI ONS OF THE TRIBUNAL CONTAINED IN ORDER DATED 30.06.2011 (SUPRA). THUS, ON THIS ASPE CT, ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 16. IN GROUND OF APPEAL NO.5, ISSUE RAISED BY THE A SSESSEE IS WITH REGARD TO A SUM OF RS.98,816/- WHICH REPRESENTED COST OF C LUB SERVICES DISALLOWED BY THE LOWER AUTHORITIES. ON THIS ASPECT ALSO, IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE SAID ISSUE IS COVERED BY THE DECIS ION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 VID E ORDER DATED 30.06.2011 (SUPRA). THE TRIBUNAL VIDE PARA 14 OF I TS ORDER DATED 30.06.2011 (SUPRA) HAS ALLOWED THE CLAIM OF THE ASSESSEE. FOL LOWING THE AFORESAID PRECEDENT, WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.98,816/- MADE OUT OF COST OF CLUB SERVICES. THUS, ON THIS ASPECT ASSESSEE SUCCEEDS. 17. IN THE LAST GROUND OF APPEAL, ASSESSEE HAS CHAL LENGED THE ACTION OF THE CIT(A) IN CONFIRMING AN AD-HOC DISALLOWANCE OF RS.3 ,17,240/- BEING 0.2% OF STAFF WELFARE EXPENSES, SALES PROMOTION, ADVERTISEM ENT EXPENSES AND TRAVELING EXPENSES TO COVER THE LEAKAGE OF REVENUE. 18. IT IS QUITE EVIDENT THAT THE DISALLOWANCE IN QU ESTION IS MADE IN AN AD-HOC MANNER AND IS BASED ON MERE SURMISES AND CONJECTURE S. WE THEREFORE SET- ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESS ING OFFICER TO DELETE THE ADDITION OF RS.3,17,240/-. THUS, ON THIS ASPECT AS SESSEE SUCCEEDS. ITA NO.2300/PN/2012 ITA NO.2442/PN/2012 19. IN THE RESULT, WHEREAS THE APPEAL OF THE ASSESS EE IS PARTLY ALLOWED THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 18 TH MARCH, 2015. SD/- SD /- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 18 TH MARCH, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-V, PUNE; 4) THE CIT-V, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE