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TMI Blog2015 (8) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... STV as partners with MS and KTV, it was agreed to pay ₹ 30 lakhs to Neville J. Mistry. Since the assessee was not having sufficient funds, the money was taken from TDV. It was agreed that on payment of said ₹ 30 lakhs Neville J. Mistry will retire from the firm. As per the agreement, Rs., 30 lakhs was given by TDV to MS, PTV, STV and KTV. A bare perusal of this would show that TDV had given loan to four persons. The loan was secured by a charge on the income of M/s. Fizza Publicity (assessee). ₹ 13.70 lakhs paid by the assessee is nothing but the repayment of loan for and on behalf of the 4 persons. In our understanding of the fact and the law, this is nothing but the application of income has rightly held by the Ld. CIT(A). - Decided against assessee. Disallowance u/s. 43B on account of Service tax payable - the amount has not been paid before the due date of filing the return. - Held that:- The assessee has debited the entire sum of ₹ 18,44,091/- to its profit and loss account therefore the fact of the case are clearly distinguishable from the facts of the decision relied upon by theLd. Counsel. We also find that the Tribunal has considered the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer noticed that the assessee has debited its profit and loss account on account of repairs and maintenance expenses amounting to ₹ 29.56 lakhs. The assessee was asked to clarify the allowability of the same. The assessee filed the necessary details. On perusal of the details filed by the assessee, the AO found that the major expenses are with respect to purchase of M. S channels, G.P. sheets and labour charges for fabrication and foundation for the hoarding structures. The AO was of the firm belief that the expenses have been incurred for capital purpose giving enduring benefit and is not in the nature of current repairs. Drawing support from the decision of the Hon ble Supreme Court in the case of Balimal Naval Kishore and Another Vs CIT 224 ITR 414, the AO treated the expenses of ₹ 29.56 lakhs as capital expenditure and accordingly allowed depreciation on the same. 4. Before the Ld. CIT(A), the assessee reiterated what has been stated before the AO. It was strongly contended that no new asset have been created. The expenditures incurred are of revenue in nature and were incurred to preserve and maintain an already existing assets. After considering the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the said agreement, it is mentioned that NM wanted to dissolve the firm and have a receiver appointed or to be allowed to repair from the firm w. E. F. the midnight of 31.3.2006 on consideration of ₹ 30 lakhs in full and final settlement against all claims and demands. In the firm M/s. Fizza Publicity (assessee) PTV and STV joined as partners with MS KTV w. E. F. 1.4.2006. In the said agreement, it is also provided that Mr. PTV, STV and KTV do not have the requisite liquidity for making the said payment of ₹ 30 lakhs to NM, therefore, TDV gave ₹ 30 lakhs to be paid to NM in consideration of NM retiring from the firm M/s. Fizza Publicity (assessee) w. E. F. 31.3.2006. In the said agreement, it is specifically provided that the said amount of ₹ 30 lakhs shall be given back by the 2nd, 3rd, 4th 5th parties to TDV on or before 31.12.2007 and the return to TDV was secured as a charge on the income of M/s. Fizza Publicity (assessee). The payment of ₹ 13.70 lakhs was in pursuance to this agreement and this charge on the profit. 8.1. During the course of the assessment proceedings, the assessee was asked to justify its claim. It was explained that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. We have carefully gone through the written note referred to by the Ld. Counsel. We have also considered the orders of the authorities below. The Undisputed fact is that in order to retire Shri Neville J. Mistry and to admit PTV and STV as partners with MS and KTV, it was agreed to pay ₹ 30 lakhs to Neville J. Mistry. Since the assessee was not having sufficient funds, the money was taken from TDV. It was agreed that on payment of said ₹ 30 lakhs Neville J. Mistry will retire from the firm. As per the agreement, Rs., 30 lakhs was given by TDV to MS, PTV, STV and KTV. A bare perusal of this would show that TDV had given loan to four persons. The loan was secured by a charge on the income of M/s. Fizza Publicity (assessee). ₹ 13.70 lakhs paid by the assessee is nothing but the repayment of loan for and on behalf of the 4 persons. In our understanding of the fact and the law, this is nothing but the application of income has rightly held by the Ld. CIT(A). We, therefore decline to interfere. Ground No. 2 is accordingly dismissed. 14. Ground No. 3 relates to the disallowance u/s. 43B on account of service tax. 15. The AO found that as against ₹ 18,44,091 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses . The assessee was asked to file details. However, no detailed submission was made. The AO observed that in A.Y. 2005-06, a similar disallowance was made and accordingly following the same basis an amount of ₹ 4,84,545/- was disallowed. 22. The assessee carried the matter before the Ld. CIT(A) but without any success. 23. Before us, the Ld. Counsel for the assessee stated that the Revenue authorities have grossly failed in understanding the facts of the case. It is the say of the Ld. Counsel that the electricity expenses pertain to the electricity on hoarding sites and not to the company premises used by the assessee along with others. As the facts have not been properly appreciated by the lower authorities, in the interest of justice and fair play, we restore this issue to the file of the AO. The assessee is directed to furnish necessary details before the AO and the AO is directed to decide the issue afresh in the light of the details furnished by the assessee and after giving reasonable and sufficient opportunity of being heard to the assessee. Ground No. 4 is accordingly allowed for statistical purpose. ITA No. 4847/M/2012- A.Y. 2008-09 24. Ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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