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TMI Blog2018 (3) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... anation given is very logical. We hold that the expenditure in the sum of ₹ 90,850/- would have to be allowed as a deduction u/s 37 of the Act Disallowance of Entertainment Expenses - Held that:- We find that the entertainment expenses of ₹ 11,096/- incurred by the assessee were only for the purpose of dinner while holding meetings with his seniors in hotels for skill upgradation. This would be squarely allowable as business expenditure. It is not the case of the ld. AO that the same are not supported by any bills or vouchers. Accordingly, the same is allowed as deduction u/s 37. Disallowance of travelling expenses - Held that:- We find that the assessee has only made oral submissions to justify his claim and had not produced any evidence in support of his claim of visiting U.K., London for the purpose of medical conference and meeting senior doctors thereon in order to get himself updated and improve his skill. Hence, we hold that the revenue had rightly disallowed the said expenditure in the assessment. Disallowance of meeting and seminar expenses - Held that:- It is not in dispute that the assessee is a member of Calcutta Club and Bengal Club. From the deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. AO. The assessee runs a clinical laboratory named The Oxford Clinic . The ld. AO observed that the assessee has debited a sum of ₹ 202014/- under the head advertisement and publicity. The ld. AO sought to verify the same and accordingly show caused the assessee to prove as to how the said expenditure would be treated as an expenditure incurred wholly and exclusively for the purpose of business. In response to this, the assessee stated that he had prepared several medical literatures in the field of Urology and publicized the same in various news papers and TV channels. The literatures are meant for general awareness so as to prohibit and cure the urological diseases. All these publications were made on behalf of the clinic and the clinic being a proprietary concern of the assessee, the payments for the same were made by the assessee, the details of the same were furnished as under: The assessee submitted that these expenditures were incurred to publicize medical materials with a common sense approach so that general people take interest to the disease and solution thereon. It was further submitted that it is a common knowledge that TV programmes in Prasar Bharati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the telecast fee to Prasar Bharti, being a government organization, is made only for informing the general public at large about the urological diseases and necessary preventive measures to be taken by the public for not getting invited with these diseases.. We are in agreement with the argument advanced by the Ld. AR that Prasar Bharati, being a government organization, would not allow any programme on national television in order to promote the business of just a single doctor like assessee. We also hold that Prasar Bharati being a Government Organization would not receive any fee for any service connected with offence under any Act or any law. In other words, they would not engage in any activity and receive consideration for the Act which is prohibited by law. We are also inclined to accept the argument of the ld. AR that the assessee had incurred expenses to explain by publicizing a general literature with image and diagram of human body to make aware of the urological diseases including its prevention and cure, which cannot be merely treated as advertisement or publicity expenses. 5. The ld. AO had stated that the expenditure incurred towards advertisement by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by assessee stock broker who was a member of NSE, on account of unfair trade practice and un-business like conduct is not for violation of law and hence, cannot be disallowed. The members of NSE Ltd are bound through the articles of association to abide by the rules, regulations and bye-laws of the NSE Ltd. Nevertheless, such rules, regulations and bye-laws can be considered as regulations for controlling the internal inter se obligations and rights of the members of NSE Ltd. Though every member of NSE Ltd would be obliged to abide by such rules and regulations, a violation thereof cannot be treated as violation of a statutory law or rule. The fines and penalties levied for violation on account of unfair trading practice as specified in 4.6 of the NSE regulations and un-business like conduct as specified in IV(4)(e) of the NSE rules cannot be equated with violation of a statutory rule or law. Thus, fine paid by the assessee stock broker who was a NSE member, on account of unfair trade practice and un-business like conduct , is not for violation of law and, hence, cannot be disallowed. c) Master Capital Services Ltd vs DCIT reported in (2008) 23 SOT 60 (C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case and respectfully following the aforesaid judicial precedents, we hold that the expenditure incurred in the sum of ₹ 202014/- deserves to be allowed as business expenditure of the assessee u/s 37(1) of the Act. 6. Disallowance of purchase of gift items incurred through credit card:- ₹ 90850/- The assessee submitted that he had incurred expenses of ₹ 90850/- for purchase of gift items for seniors and other doctors with whom the assessee had to interact to discuss latest techniques, methods etc while conducting surgeries and other medical treatments. The purchase of gift items were in the form of gold ornaments, leather goods, dress materials, suitcase and other utility items etc. The assessee explained that the he had organized various seminars and in the said seminars several senior doctors and fellow doctors in the profession had participated and had shared their knowledge and wisdom, to whom gifts were given by the assessee in the place of fees payable to them for sharing their knowledge. Accordingly, the assessee also explained that the profession requires continuous updation of knowledge and learning modern technology. For this pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case the learned Commissioner of Income Tax (Appeals) erred in upholding the disallowance of ₹ 11,096/- on account of entertainment expenses u/s 37(1) of the IT Act, 1961. The disallowance was not called for and hence the same be reversed. 9. We have heard the rival submissions. We find that the entertainment expenses of ₹ 11,096/- incurred by the assessee were only for the purpose of dinner while holding meetings with his seniors in hotels for skill upgradation. This would be squarely allowable as business expenditure. It is not the case of the ld. AO that the same are not supported by any bills or vouchers. Accordingly, the same is allowed as deduction u/s 37 of the Act and hence the ground no. 4 raised by the assessee is allowed. 10. Disallowance of travelling expenses- ₹ 68,246/- Brief facts of this issue is that the ld. AO observed that the assessee had incurred foreign travel expenses to the tune of ₹ 68,246/-, for which details were sought by the ld. AO. The assessee replied that the said expenditure was incurred for attending medical conference in London as well as meeting doctors and surgeons in London. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember and accordingly the said expenditures are wholly and exclusively for the purpose of business of the assessee. The ld. AO however did not agree with this view and proceeded to disallow this sum of ₹ 15,478/- in the assessment which was upheld by the Ld. CIT(A). Aggrieved the assessee is in appeal before us on the following ground: 6. For that in the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) erred in upholding the disallowance of ₹ 15,478/- on account of Meeting Seminar expenses u/s 37(1) of the IT Act, 1961. The disallowance was not called for and hence the same be reversed. 13. We have heard the rival submissions. It is not in dispute that the assessee is a member of Calcutta Club and Bengal Club. From the details submitted before the ld. AO, it was found that these expenses are incurred towards monthly subscription of club bills and for meager portion towards meeting expenses of doctors on certain occasions. In our considered opinion these expenses are wholly and exclusively meant for the purpose of business and are squarely allowable as deduction u/s 37(1) of the Act. Accordingly, ground no. 6 raised by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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