M/S. S.P. JAISWAL ESTATES PVT. LTD.,KOLKATA V. D.C.I.T., CC - 2(4), KOLKATA, KOLKATA

ITA 1032/KOL/2024

AI Insights

The case involves M/s. S.P. Jaiswal Estates Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), Kolkata, concerning the disallowance of club subscription and expenditure in the assessment year 2018-19. Initially, the Central Processing Center (CPC), Bengaluru, disallowed the club subscription and expenditure, which was partially rectified to allow some expenditures but upheld the disallowance of the membership subscription. The CIT(A) confirmed the disallowance, leading to the appeal before the Tribunal. The Tribunal found that the CPC had acknowledged the debatable nature of the issue by partially allowing the expenditure in the rectification application, thus ruling in favor of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32902 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR MEENA
• Assessee Lawyers: SUJOY SEN
• Keywords: Condonation of delay
• Section: 250; 154; 143(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No. 1032/Kol/2024 Assessment Year: 2018-19 M/s. S.P. Jaiswal Estates Pvt. Ltd. C/o M/s. Salarpuria Jajodia & Co., 7, C. R. Avenue, 3rd floor, Kolkata-700072. (PAN: AAGCS5052F) Vs DCIT, Central Circle-2(4), Kolkata. (Appellant) (Respondent) Present for: Appellant by : Shri Sujoy Sen, Advocate Respondent by : Shri Arun Kumar Meena, Addl. CIT, Sr. DR Date of Hearing : 05.03.2025 Date of Pronouncement : 05.03.2025 O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Kolkata-21 [hereinafter referred to as “the Ld. CIT(A)”] vide order no. ITBA/APL/S/250/2021- 22/1039242329(1) dated 31.01.2022 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2018-19. 2. Shri Sujoy Sen, Advocate appeared on behalf of the assessee and Shri Arun Kumar Meena, Addl. CIT, Sr. DR appeared on behalf of the revenue. 3. This appeal of the assessee is time barred by 768 days. A separate condonation of delay petition has been placed in file. Considering the 2 ITA No.1032/Kol/2024 S.P. Jaiswal Estates P. Ltd. AY: 2018-19 averments made in the said application and in the interests of justice, we condone the delay and admit the appeal for hearing. 4. It was submitted by the Ld. AR that the assessee is a company, filed its return of income along with audit report for the regular assessment year. The intimation u/s. 143(1) came to be issued by the CPC, Bengaluru wherein club subscription and expenditure had been disallowed. It was the submission that an application u/s. 154 came to be filed by the assessee and in the 154 rectification the CPC, Bengaluru allowed the club expenditure of Rs.4,30,061/- but upheld the disallowance of Rs.1,15,844/- representing membership subscription. It was the submission that on appeal before the Ld. CIT(A), the Ld. CIT(A) confirmed the intimation u/s. 143(1) by holding that the adjustment permissible in 143(1) included the disallowance of expenditure incurred in audit report but not taken into account in computing the total income in the return. It was the submission that in the 154 application, the CPC having partly allowed the expenditure itself showed that the issue was a debatable one and the same should not be disallowed in an intimation u/s. 143(1) of the Act. It was further submitted that the CPC having allowed the club expenditure obviously should have appreciated that without the membership the expenditure could not have been incurred by the assessee and should have allowed the claim of expenditure of Rs.1,15,844/-. It was the prayer that the addition as confirmed by the Ld. CIT(A) may be deleted. 5. In reply, the Ld. Sr. DR submitted that the Ld. CIT(A) has taken into consideration the fact that the disallowance has been made out of the expenditure indicated in the audit report but not taken into account the returned income. The disallowance as made in the intimation itself is valid and the same is liable to be upheld. 3 ITA No.1032/Kol/2024 S.P. Jaiswal Estates P. Ltd. AY: 2018-19 6. We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the CPC passed the order u/s. 143(1) disallowing the club expenditure. The CPC itself has passed the order u/s. 154 allowing part of the expenditure. Thus, clearly the CPC has accepted that the issue on which the disallowance has been made is a debatable issue. The CPC having allowed the club expenditure should have understood that without membership subscription there is no question of expenditure. This being so, we are of the view that the disallowance as confirmed by the Ld. CIT(A) is also unsustainable and the same stands deleted. 7. In the result, the appeal of the assessee stands allowed. Order dictated and pronounced in the open court. Sd/- Sd/- (Rakesh Mishra) (George Mathan) Accountant Member Judicial Member Dated: 5th March, 2025 JD, Sr. P.S. Copy to: 1. The Appellant: M/s. S. P. Jaiswal Estates Pvt. Ltd. 2. The Respondent. DCIT, Central Circle-2(4), Kolkata. 3. CIT(A)-21, Kolkata 4. Pr. CIT 5. DR, ITAT, Kolkata. 6. Guard file. True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "