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TMI Blog2022 (3) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... fee paid to club, is not permissible u/s. 143(1)(a)(iv) . Additions made towards car expenses and subscription fee paid to club, although assessee claims that in Form No. 3CD - HELD THAT:- Tax Auditor has reported expenses of personal in nature in respect of car expenses of Salem Branch instead of actual expenses being 10% of Salem Office car expenses we find that the assessee claims to have made disallowance being 10% of car expenses on Salem Branch, wherein, the Tax Auditor has reported ₹ 16,970/-. The difference between expenses reported by the assessee and the expenses disallowed by the Tax Auditor is at ₹ 4,316/- and the same has been added by the AO. The facts need to be verified with reference to statement of total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ( J ) And G. Manjunatha , Member ( A ) For the Appellant : G. Baskar and I. Dinesh, Advs For the Respondents : Sajit Kumar, JCIT ORDER Per G. Manjunatha, Accountant Member This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-2, Chennai, dated 01.09.2020 and pertains to assessment year 2017-18. 2. The assessee has raised the following grounds of appeal: 1.1 The action of CIT(A) in dismissing the appeal is bad in law and is in gross violation of the provisions of the Income Tax Act. 1.2 The CIT(A) ought to have quashed the intimation inasmuch as the disallowances made are not prima facie adjustments contemplated in Sec. 143(1) of the IT Act; and hence b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to appreciate that the appellant follows cash system of accounting and credit for TDS can be claimed only in the year in which there is actual receipt of fees. 3. The brief facts of the case are that assessee filed its return of income for the AY 2017-18 on 07.10.2017 admitting a total income of ₹ 2,94,52,927/-. The return filed by the assessee has been processed u/s. 143(1) of the Act and determined total income at ₹ 2,97,66,591/- by making additions towards disallowance of car expenses and club subscription and club expenses amounting to ₹ 3,13,664/- by holding that there is inconsistency in total amount of disallowance as per Income Tax Return when compared to amount mentioned in the Annexure to Tax Audit Report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the same needs to be allowed as incurred wholly and exclusively for the purpose of business. 5. The Ld. DR, on the other hand, submitted that as per Clause (iv) of Sec. 143(1)(a) of the Act, the AO can make adjustment towards disallowance of expenditure indicated in the Audit Report, but not taken into account in computing the total income in the return. Therefore, there is no merit in arguments of the Ld. Counsel for the assessee that the AO cannot make adjustment towards disallowance of expenses u/s. 143(1)(a) of the Act. As regards, disallowance of expenditure, the Ld. DR submitted that the assessee has failed to make out a case that expenditure incurred towards subscription fee paid to club and expenses of club is not personal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10% of car expenses on Salem Branch, wherein, the Tax Auditor has reported ₹ 16,970/-. The difference between expenses reported by the assessee and the expenses disallowed by the Tax Auditor is at ₹ 4,316/- and the same has been added by the AO. The facts need to be verified with reference to statement of total income filed by the assessee and Tax Auditor Report issued by the Auditor. Therefore, we are of the considered view that this issue needs to go back to the file of the AO. 7. As regards disallowance of club subscription and club expenses, on perusal of details filed by the assessee including break up of club expenses, we find that the assessee has made payments to various clubs in Chennai and other places, which are in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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