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TMI Blog2016 (11) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the case and in law, the AO erred in disallowing Rs. 215,000/- being compensation paid by the assessee under the "Agreement for Extra Amenities" for use of premise. 2. Disallowance of Defferred Revenue Expenditure - Rs. 25,880/- being 1/5th of the pre-operative expense:- On the facts and circumstances of the case and in law, the AO has erred in treating the pre-operative expenses as covered u/s.35D and disallowed 1/5th of the same claimed by the assessee. 3. Addition u/s.69C of Rs. 58,635/-:- On the facts and circumstances of the case and in law, the AO erred in making an addition of Rs. 58,635/- on the grounds that there were negative cash balances appearing in the cash book on various dates. 3. The brief facts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese grounds are not sufficient to deny the claim of the assessee. The leave and licence agreement dated 06.01.2011 which lies at page one of the paper book. Whereas the other agreement for extra amenities is also on record which was executed by the licensor/ assessee for paying an amount of Rs. 55,000/- as amenities charges for the period w.e.f December 2010 to December 2013. The veracity of these documents are required to be ascertained by the Assessing Officer as well as the CIT(A) but they did not do. The Licensor has also confirmed the payment for extra amenities which has been produced before us and lies at 17 of the paper book. Further the TDS has also been deducted by the assessee to the tune of Rs. 19,250/- and the challan in this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 5000/- against the total claim of Rs. 26,880/-. The appellant had incurred certain preoperative expenses amounting to Rs. 1,35,395/-. In earlier this amount was deferred and claimed over a period of 5 years. The Assessing Officer disallowed the said expenses on the ground of that the same was not allowable u/s.35D of the Act. The contention of the appellant is that the appellant did not raise any claim u/s.35D of the Act but has deferred revenue expenses. The only question which is required to be decided by us is that whether the deferred revenue expense is required to be allowed or not. In this regard the matter of controversy has been adjudicated by the Hon'ble High Court of Bombay in case of Commissioner of Income Tax - 2, Mumbai V/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the view that no doubt there was negative entry in the cash book but it was also on record that no cash lies with the assessee company. The assessee company without having cash were claiming the expenditure, therefore, the Assessing Officer declined the claim of the assessee and the CIT(A) has also confirmed the same. On seeing the cash book the authority disallowed the claim. The matter was not properly examined by the authority to arrive at this conclusion that the expenditure was justifiable or not. The contention of the assessee was not discussed at all. All the negative cash balance was added to the income of the assessee u/s.69C of the Act. The expenditure is in connection with the expenditure incurred by the employee of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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