Deduction on Physical Fitness Expense not Allowable in Absence of Evidence to Prove the Expenses were for Professional Purposes: ITAT upholds Disallowance [Read Order]

The Hyderabad bench of the Income Tax Appellate Tribunal( ITAT ) has held that deduction on physical fitness expenses is not allowable in the absence of evidence to prove the expenses were for professional purposes.

Mr D. Venkatesh, the appellant challenged the order of the Commissioner of Income Tax Appeals in upholding the order of the assessing officer in disallowing foreign travel expenses, Other expenses, security service charges, Swimming pool rent, ad-hoc disallowance under 14A against the principles of justice, the weight of evidence and probabilities of the case

It was alleged that the  Assessing Officer and Commissioner of Income Tax, Appeals were wrong in disallowing/ upholding a sum of Rs.43797/- (25% of physical fitness expenses) as physical fitness is a part and parcel of the appellant’s profession as a film artiste and disallowance of same on an ad-hoc basis is against the provisions of the Act

The Assessee has debited an amount of Rs.1,75,188/- towards his physical fitness in the profit and loss account.  The difference in the said amount worked out to Rs.53,695/- and 20% of the same amounting to Rs.10,739/- was disallowed by the Assessing Officer as the same was personal and added to the total income of the assessee.  The Assessing Officer also disallowed Rs.902/- towards loss in Venkatesh Enterprises. The assessee submitted that physical fitness expenses were incurred for the profession of the assessee and were a part and parcel of the assessee’s profession being a film artist

 Further submitted that disallowance was inadvertently made in the computation of income filed by the assessee.  However, the CIT(A) directed the Assessing Officer to disallow 25% of the total physical fitness expenses of Rs.1,75,188/-  and thereby granted relief of Rs.88,435/- to the assessee. 

A two-member bench comprising of Shri R K Panda, Vice President and Shri Laliet Kumar, Judicial Member while dismissing the appeal observed that “Though the physical fitness was a part and parcel of assessee’s profession it cannot be held to be incurred wholly and exclusively for the profession of the assessee.  Even the assessee has not filed any evidence to show that he underwent any weight loss program to fulfil his professional commitment.  Hence, we do not find any reason to interfere with the finding of ld.CIT(A) on this issue.  Thus, this ground of the assessee dismissed.” 

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