Dakshin Damodar Cold Storage Private Limited Vs ACIT (ITAT Kolkata
Festival Donations Allowable u/s 37(1) – No TDS Disallowance When Bills Below Threshold – Preliminary Expenses @1/5th Allowed – Interest Addition Sustained – ITAT Kolkata
In this case, the assessee challenged various additions confirmed by CIT(A) for AY 2013-14. The ITAT partly allowed the appeal after examining each disallowance independently.
The Tribunal deleted the addition towards festival donations and subscriptions, holding that payments for puja, sports or local activities made to maintain business relations are allowable business expenditure u/s 37(1), even if recipients are not registered u/s 80G. It observed that such expenses are customary and commercially expedient in the local business environment.
Regarding repairs & maintenance expenses disallowed u/s 40a(ia) for non-deduction of TDS u/s 194C, ITAT held that individual payments were below the prescribed TDS threshold and incurred on different dates. Hence, provisions of disallowance were not attracted and the addition was deleted.
The Tribunal also allowed the claim of preliminary expenses, noting that the assessee had been consistently claiming 1/5th amortisation of earlier year expenditure which had been accepted in past assessments; therefore, disallowance merely for lack of fresh details was unjustified.
However, the addition relating to interest accrued on security deposit was sustained since the assessee failed to disclose such income in the return.
Accordingly, the appeal of the assessee was largely allowed, with only the interest income addition upheld.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Gurugram, (hereinafter referred to as the “Ld. CIT(A)”] dated 16.12.2024 for the AY 2013-14.
