Case Law Details
M/s. EPE Process Filters & Accumulators Pvt Ltd. Vs DCIT (ITAT Hyderabad)
Assessee’s submissions in support of its claim u/s 37 of the Act are that it has purchased the IPL cricket match tickets to distribute them amongst its long standing customers to garner their goodwill and improve its business relations and therefore, it is its business expenditure. According to us, this is a plausible and acceptable submission. This is akin to distribution of gifts or articles on special occasions to the customers and such expenditure has been held to be business Further, in reply to Revenue’s contention that the assessee has failed to produce any evidence in support of its contention, the learned Counsel for the assessee has filed a list of the customers amongst whom the IPL Cricket match tickets have been distributed. The learned DR opposed the admission of this evidence at this stage and submitted that, if the Tribunal were to consider the same, then the said evidence should be remanded to the file of the AO. This list was admittedly not produced before any of the authorities below. Therefore, we treat it as additional evidence and admit the same and remand the issue to the file of the AO to verify whether these parties were the customers of the assessee and whether they were given the alleged IPL seasonal tickets.
FULL TEXT OF THE ITAT JUDGMENT
This is assessee’s appeal for the A.Y 2009-10 against the order of the CIT (A)-5, Hyderabad, dated 29.03.20 16.
2. Brief facts of the facts are that the assessee company, engaged in the business of manufacture of filters and accumulators, filed its return of income for the A.Y 2009-10 on 29.09.2009 admitting income of Rs.2,74,93,921/-. During the assessment proceedings u/s 143(3) of the Act, the assessee was required to produce its books of account. The assessee produced the same and after perusal and verification of the same, the AO found that the assessee has debited an amount of Rs.5,50,000/- towards purchase of 150 seasonal tickets of IPL cricket matches held at Hyderabad. When the details were called for, the assessee filed a letter stating that the said tickets were distributed amongst its long standing customers and business associates and therefore, the said distribution served the purpose of promotion of business relations and goodwill among the customer base of the company and also in encouragement of sports, which is a part of the company’s corporate social responsibility. Therefore, the assessee submitted that the expenditure satisfies all the conditions stipulated u/s 37(1) of the I.T. Act and should be allowed as such.
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