9911796707
TMI Blog2015 (8) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... 75/M/2011 - A.Y. 2007-08 2. The first ground relates to the treatment of expenditure of Rs. 29,16,556/- incurred on repairs and maintenance as capital expenditure. Ground No. 2 relates to the addition of Rs. 13.70 lakhs in respect of charge on income ignoring the fact that the payment was diversion of income by overriding title. Ground No. 3 relates to the disallowance u/s. 43B of the Act on account of Service tax payable amounting to Rs. 6,91,417/- and ground No. 4 relates to the disallowance of electricity expenses of Rs. 4,84,545/-. 3. The assessee is in the business of outdoor advertising. Exhibiting cinema slides & short films in theatres. While scrutinizing the return of income, the Assessing Officer noticed that the assessee has d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated what has been submitted before the lower authorities. It is the say of the Ld. Counsel that the expenditure have been incurred for replacing parts, iron which has been rusted in the rains and therefore the repairs were only in respect of existing assets. The Ld. Counsel further stated that even if the expenditure is not considered as on account of current repairs, the same need to be allowed u/s. 37(1) of the Act. 6. The Ld. Departmental Representative strongly supported the assessment order. 7. We have carefully perused the orders of the authorities below. We have also given a thoughtful consideration to the documentary evidences brought on records. A perusal of the bills exhibited in the paper book show that the expenses have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 30 lakhs to NM, therefore, TDV gave Rs. 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 Rs. 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 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Strong support was drawn from the decision of the Hon'ble Supreme Court in the case of Provat Kumar Mitter 41 ITR 624. The Ld. CIT(A) held that the dispositions were in law and in fact, portions of the assessee's income after it had accrued to him and tax was payable by him at the point of accrual. Further support was drawn from the decision in the case of CIT Vs Imperial Chemical Industries (India) Pvt. Ltd. 74 ITR 17 (SC). The Ld. CIT(A) further observed that the assessee failed to demonstrate that TDV had a pre-existing title to the monies. Merely by inserting a clause in the deed of agreement only indicates that the appellant had an obligation to pay Shri Vora a certain amount, it does not prove that Shri Vora had a pre-existing titl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that as against Rs. 18,44,091/- billed during the year, the assessee has collected and paid only an amount of Rs. 11,52,674/-. The AO was of the opinion that the balance amount of Rs. 6,91,417/- has not been paid during the year. The AO further found that even the auditors have not certified that the said payments have been paid before the due date of filing the return. The assessee was asked to explain why the said sum should not be disallowed u/s. 43B of the Act. The assessee stated that the liability for payment of service tax arises only on receipt of payment and since the amount has not been received, there is no liability for payment and therefore, the same cannot be disallowed. The AO Found that the assessee has claimed the entire s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn, the AO found that the assessee has debited a sum of Rs. 6,46,061/- to its profit and loss account under the head "Office Electricity expenses". 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 Rs. 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 premi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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