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TMI Blog2019 (2) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... rom other sources. We find that the alternative submissions of the assessee deserve consideration as the assessee has earned remuneration which is assessable as business income. These expenses can be considered u/s. 37(1) as business expenses after factual examination of the nexus with earning the business income. In this regard, the ld. Counsel of the assessee has agreed that the matter may be remitted to the file of the A.O. to examine this aspect. We, accordingly, accede to this request. DR's objection to the alternative request being additional ground not raised earlier cannot be entertained. As it was expounded by the Hon'ble Apex Court in the case of Goetze (India) Ltd. v. CIT [2006 (3) TMI 75 - SUPREME COURT] that the ITAT has po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modify and/ or alter the aforesaid grounds of appeal as and when the occasion demands. 4) All the aforesaid grounds of appeal are independent, in the alternative and without prejudice to one another. 3. The assessee has also filed the additional ground of appeal before us which reads as under: 1. The learned CIT(A) and Assessing Officer failed to appreciate that interest on car loan of ₹ 27,06,661/-, professional fees of ₹ 6,31,160/-, security charges of ₹ 5,17,850/- and travelling expenses of ₹ 9,87,951/- are alternatively allowable u/s. 37 as said expenses are not personal in nature and are incurred wholly and exclusively for business and hence, the addition of ₹ 48,93,622/- may be deleted. 4. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) laid out or expended wholly and exclusively for the purpose of making or earning such income. 6. The A.O. observed further that the assessee has not been able to establish the nexus between the income offered and the expenses claimed viz., interest on car loan of ₹ 27,06,661/- professional fees of ₹ 6,31,160/-, security charges of ₹ 5,17,850/- and travelling expenses of ₹ 9,87,951/-. That these expenses are also not allowed to the assessee as these expenses are not incurred for earning income from the head Income from other sources . That only the bank charges of ₹ 71,184/- are allowed against the interest income offered. That therefore, except the bank charges the expenses debited viz., interest on car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are directly attributable to Directors' sitting fees received by the appellant and accordingly should be allowed under the provision of section 57(iii) of the Act. It is submitted that the above expenditure is neither in the nature of capital expenditure nor in the nature of personal expenditure of the appellant. Based on the above factual and legal submissions, it is concluded that all the conditions mentioned in section 57(iii) of the Act are satisfied and disallowance of ₹ 48,43,622/- made u/s 57(iii)maybe directed to be deleted 9. The ld. CIT(A) was not convinced. He placed reliance upon the decision of the Hon ble Gujarat High Court in the case of Smt. Virmati Ramkrishna vs. CIT 131 ITR 659 (Guj.). He concluded as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f earning sitting fees as Director/MD of HDIL. As regards appellant's claim for deduction of professional fees, it would not be out of place to refer again to the case of Sznf. Virmati Ramakrishna cited above wherein identical question of deducibility of expenditure on payment of fees of different tax practitioners from dividend income u/s.57(iii) of the Act was decided as under:- 17. ...................The question which we must, therefore, examine is whether such expenditure was incurred solely in order to make or earn the dividend income. It is not in dispute that the source of such income, that is, the shares and securities, was not in direct jeopardy and that the expenditure was not incurred for the immediate purpose of preser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequently disallowing the appellant's claim for deduction of aforesaid expenses aggregating to ₹ 48,43,622/- u/s.57(iii) under the head Income from Other Sources . The disallowance made by' the A.O. is, therefore, sustained. Ground No.2 of the present appeal is accordingly. 10. Against the above order, the assessee is in appeal before us. 11. We have heard both the counsel and perused the records. The ld. Counsel of the assessee submitted that the assessee has incurred the impugned expenses for earning the director sitting fees. In the alternative the ld. Counsel of the assessee pleaded that these expenses may also be considered u/s. 37(1). For this purpose, he agreed that the issue may be remitted to the file of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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