9911796707
TMI Blog2014 (7) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... independent line of business for the assessee company from the main business of settling the beneficiaries claimed on behalf of the insurance companies under the RSBY scheme could not be controverted by the Ld. Departmental Representative. Departmental Representative also could not controvert the finding given by the CIT(A) that the amount received during the year has been shown as income and the assessee has claimed the corresponding expenditure incurred on the printing and issue of smart cards. No infirmity in detailed reasoning given by the CIT(A). Merely because the amount appears to be huge cannot be a ground to disallow the same on the ground of enduring benefit to the assessee when the corresponding revenue earned has been consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... card per family is approximately ₹ 77/-. Further, the costs of smart card vests with the BPL family and the card is the property of Ministry of Labour and Employment, Government of India. The AO on perusal of the scheme noted that the card is renewable from time to time although the validity of the card has been stated to be one year. According to the AO the same card can be revalidated on software for any number of years from time to time. He, therefore, asked the assessee to explain as to why the entire amount should be allowed as expenditure in the impugned assessment year. Rejecting the various explanations given by the assessee and holding that the assessee will get enduring benefit out of this investment for years together the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant enters into contract with the empanelled insurance company to perform the following activities on behalf of the insurance company : (i) Enrollment of beneficiaries (ii) Print and issue Smart card (iii) Supply and maintenance of smart card (iv) Collection of registration fees of ₹ 30 from beneficiaries (v) Carry out empanelment of process of hospitals (vi) Dispatch of beneficiaries details to the back end server after issuance of cards For all the above, the appellant incurs approximately ₹ 77 towards cost of each Smart Card and receives service charge of ₹ 97 approximately per Smart card from the insurer. 15. It is against this background that the Assessing Officer's objection regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat district, as decided by the State Govt. and provide them the smart cards. It is only with reference to these new beneficiaries that the appellant company would both earn income (from issue of cards) and incur expenditure. In my opinion, the appellant has followed the correct mercantile system of accounting in respect of his business. The Assessing Officer has erroneously overlooked the aspect regarding matching income and expenditure while making the disallowance. Accordingly, it is directed that the disallowance is not proper and therefore, Ground No. 3 succeeds. 4. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : 1. The order of the learned Commissioner of Income-tax (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal 5. We have considered the rival arguments made by both the sides. From the finding given by the CIT(A) we notice that as against incurring of approximately ₹ 77/- towards cost of each smart card the assessee received service charge of ₹ 97/- per smart card from the insurer. Further, the finding given by the Ld.CIT(A) that the issue of smart card per se is completely independent line of business for the assessee company from the main business of settling the beneficiaries claimed on behalf of the insurance companies under the RSBY scheme could not be controverted by the Ld. Departmental Representative. Further, the Ld. Departmental Representative also could not controvert the finding given by the CIT(A) that the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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