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Dr. Ashok Seth, A 20, Geetanjali Enclave, New Delhi 110 017. Vs. DCIT, Circle 37 (1), New Delhi.
March, 16th 2015
           IN THE INCOME TAX APPELLATE TRIBUNAL
                (DELHI BENCH `A' : NEW DELHI)

           BEFORE SHRI G.C. GUPTA, VICE PRESIDENT
                              and
            SHRI B.C. MEENA, ACCOUNTANT MEMBER

                         ITA No.554/Del./2013
                    (ASSESSMENT YEAR : 2009-10)

                         ITA No.5298/Del./2013
                    (ASSESSMENT YEAR : 2010-11)

Dr. Ashok Seth,                               vs.   DCIT, Circle 37 (1),
A ­ 20, Geetanjali Enclave,                         New Delhi.
New Delhi ­ 110 017.

      (PAN : AARPS1432R)

      (APPELLANT)                                   (RESPONDENT)

              ASSESSEE BY : Shri T.R. Talwar, Advocate
              REVENUE BY : Ms. Y. Kakkar, Senior DR

                   Date of Hearing       : 05.03.2015
                   Date of Pronouncement : 13.03.2015

                                       ORDER

PER B.C. MEENA, ACCOUNTANT MEMBER :

      ITA No.554/Del/2013

      ITA No.554/Del/2013 filed by the assessee emanates from the order of

CIT (Appeals)-XXVIII, New Delhi dated 21.11.2012 for the assessment year

2009-10.

2.    The assessee is a Doctor and earning income from salary/business/

profession/capital gain and other sources.   The Assessing Officer has made
                                        2          ITA Nos.554 & 5298/Del./2013


certain additions which have been confirmed by the CIT (A), against which, the

assessee is in appeal before us by taking the following grounds:-

     "On the facts and circumstances of the case the learned CIT(A) has
     erred:

     1. a) In treating the membership expenses of Rs.1,25,618/- paid
        by the appellant to the ITC Health Club & India Habitat Centre
        Health Club purely in the nature of personal expenditure and not
        relating to appellant's profession, as claimed.

        b) In ignoring that the same were incurred wholly and
        exclusively in the per-suit and for the purpose of the appellant's
        profession as a cardiologist for monitoring / determining the
        correlation between the cardio exercises and their effect on the
        performance of heart functions.

     2. a) In confirming the disallowance of a payment of
        Rs.1,68,000 actually paid during the year to the Event
        Management Services which was wholly and exclusively laid
        out for the purpose of the appellant's profession due to non-
        deduction of tax at source .

        b) In not following the ITAT Special Bench Visakhapatnam's
        decision in the case of Merilyn Shipping and Transporters V.
        Addl. CIT (2012) 136 ITD 23 (SB)

     3. a) In confirming the disallowance of Rs.3,54,086/- u/s 14A of
        the IT Act r/w Rule 8D of the IT Rules, 1962, when no direct
        and proximate nexus between the exempted income and the
        expenditure claimed has been established.

        b) In not following the ITAT Bombay bench decision in the
        case of Justice Sam P Bharucha V. Additional CIT (2012) 53
        SOT 192 (Mumbai) (URO)."


3.    In the ground no.1(a) & 1(b), the assessee has challenged confirmation of

disallowance of Rs.1,25,618/- paid by the assessee to ITC Health Club and India

Habitat Centre Health Club.
                                        3           ITA Nos.554 & 5298/Del./2013


4.     The Assessing Officer held that Rs.1,25,618/- is purely personal

expenditure and not related to the profession of the assessee. The CIT (A) has

confirmed this addition. The CIT (A) has also concur with the Assessing Officer

that the membership fee paid to the clubs by the assessee is purely in the nature

of personal expenditure and not related to the profession.




5.     Before us, the ld. AR has canvassed that the assessee is a very eminent

Doctor and he has taken the membership in order to visit the people who

undergo cardio training/exercise at the health clubs and monitor their

performance of heart functions in order to ascertain the necessity of cardio

exercises for the wellness of heart and also to determine the correlation between

the cardio exercise and its effect on the overall health of the people at these

health clubs. There is no documentary or any other evidence in support of such

pleadings.    Assessee's plea is completely baseless and not convincing.

Therefore, we are unable to agree with this contention of the ld. AR. The

membership taken by the assessee is purely for his personal benefit and it has

nothing to do with the profession and business of the assessee. Therefore, we

dismiss this ground of assessee's appeal.

6.     In the ground nos.2(a) & 2(b), the assessee has challenged the

disallowance of Rs.1,68,000/- actually paid to event management services. This

amount was paid without deducting the TDS .

7.     Before us, ld. AR relied on the order of the ITAT, Special Bench,

Visakhapatnam's decision in the case of Merilyn Shipping and Transporters vs.

Addl. CIT ­ (2012) 136 ITD 23 (SB). However, the ld. DR brought to our
                                        4          ITA Nos.554 & 5298/Del./2013


notice the letter of ld. Authorised Representative dated 25.1.2011 placed at pages

9 & 10 of the paper book wherein the assessee himself has pleaded that these

expenses be disallowed and being offered for taxation by the assessee. Ld. DR

submitted that the assessee himself has agreed to this and now this has been

challenged without any reason.

8.    We have heard both the sides on the issue.          This amount for event

management services was paid without deducting TDS. Assessee himself had

given in writing that amount be offered for taxes. The assessee's submission

with regard to offering amount to taxes has in a way restricted Assessing Officer

to make further inquiry on these expenses. In these factual matrix of this case,

we find that the decision of ITAT, Special Bench in the case of Merilyn

Shipping and Transporters vs. Addl. CIT, cited supra, is not applicable to the

facts of the assessee's case. Therefore, we find no merits on this issue in the

assessee's appeal and the same is accordingly rejected.

9.    In the ground no.3, the issue involved is confirming the disallowance of

Rs.3,54,086/-14A of the Act r/w Rule 8D of the Income-tax Rules, 1962.

10.   Ld. AR submitted that no direct and proximate nexus between the

exempted income and the expenditure claimed was established. He relied on the

decision of ITAT, Mumbai Bench in the case of Justice Sam P Bharucha vs.

Addl. CIT ­ (2012) 53 SOT 192 (Mumbai). Ld. AR submitted that the assessee

has earned only Rs.76,660/- as exempted income. Further, the assessee is having

personal drawings of Rs.27,97,024/- which is evident from the capital account of

the assessee placed at page 23 of the paper book.         The STT charges and
                                        5          ITA Nos.554 & 5298/Del./2013


brokerages have also been paid by the assessee from his personal account. The

revenue has failed to pinpoint any expenditure debited in the Income &

expenditure account for the profession of the assessee. He also pleaded that

since the assessee has not incurred any expenditure and revenue has failed to

pinpoint any specific instance, therefore, the conditions invoking the provisions

of section 14A r/w Rule 8D are not fulfilled. These provisions can be invoked

only when the Assessing Officer has satisfied himself that the correctness of the

claim of the assessee with regard to the expenditure that no expenditure has been

debited in the Income & expenditure account relating to exempted income.

11.   Ld. DR relied on the orders of the authorities below.

12.   We have heard both the sides on the issue. We find that the expenditure

related to the earning of exempted income like STT and brokerage were shown

in the withdrawals.     The assessee is also having personal drawings of

Rs.27,97,024/- for the year under consideration. All these facts show that the

assessee is not debiting the expenditure related to the exempted income in its

Income& expenditure account and the revenue has failed to pinpoint any specific

instance in this regard. Therefore, we allow this ground of assessee's appeal.




13.   In the result, the appeal of the assessee (ITA No.554/Del/2013) is partly

allowed.

      ITA No.5298/Del/2013

14.   This appeal filed by the assessee emanates from the order of the CIT

(Appeals)-XXVIII, New Delhi dated 22.07.2013 wherein the only issue involved
                                        6          ITA Nos.554 & 5298/Del./2013


is regarding the disallowance of Rs.2,54,149/- u/s 14A of the Income-tax Act,

1961 r/w Rule 8D of the Income-tax Rules, 1962.

15.      The assessee claimed that there was no direct and proximate nexus

between the exempted income and the expenditure claimed. It was pleaded that

none of the expenditure incurred and claimed by the assessee is in relation to the

exempted income in its Income & expenditure account.

16.      We have heard both the sides on the issue. For the similar reasons as

stated above in the assessment year 2009-10, we allow this ground of assessee's

appeal as the revenue is failed to pinpoint any expenditure in the Income &

expenditure account. Further, the assessee is incurring such expenses from his

personal drawings. Accordingly, this ground of assessee's appeal is allowed.

17.      In the result, the appeal of the assessee (ITA No.5298/Del/2013) stands

allowed.

18.      To sum up : the appeal of the assessee being ITA No.554/Del/2013 is

partly allowed and the appeal filed by the assessee being ITA No.5298/Del/2013

is allowed.

      Order pronounced in open court on this 13th day of March, 2015.



                      Sd/-                               sd/-
                (G.C. GUPTA)                        (B.C. MEENA)
              VICE PRESIDENT                    ACCOUNTANT MEMBER

Dated the 13th day of March, 2015
TS
                               7   ITA Nos.554 & 5298/Del./2013



Copy forwarded to:
     1.Appellant
     2.Respondent
     3.CIT
     4.CIT(A) -XXVIII, New Delhi
     5.CIT(ITAT), New Delhi.
                                              AR, ITAT
                                            NEW DELHI.

 
 
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