Compensation on death of guest in swimming pool of hotel is allowable Expenses

IN THE ITAT KOLKATA BENCH ‘A’

EIH Ltd.

v.

Deputy Commissioner of Income-tax, Circle-8, Kolkata

IT APPEAL NOS. 316 & 426 (KOL.) OF 2006 & 1808 (KOL.) OF 2007
[ASSESSMENT YEAR 2002-03]

SEPTEMBER  11, 2015

Facts of the Case (Para no 14) :-

The brief facts of this issue is that the assessee had paid certain adv ances as per the directions of the Delhi High Court in the earlier years towards a possible claim that might arise in the form of compensation due to the death of a guest in the swimming pool of the hotel in the year 1997-98 and this issue was under litigation before the Hon’ble Delhi High Court. During the Asst Year 2002-03, the assessee received the final order from the Delhi High Court wherein, it was held that the advances already paid shall be treated as compensation paid by the assessee. Accordingly, this advance was written off in the books of the assessee during Asst. Year 2002-03 and deduction claimed accordingly as expenditure incurred wholly and exclusively for the purpose of business.

AO Contention 

The Learned Assessing Officer records this fact but proceeded to disallow the same as the copy of the Delhi High Court order was not placed before him.

HELD

court order is very much in the public domain and cannot be construed as an additional evidence filed by the assessee before the Learned CIT (Appeals).

Complete Judgement EIH Ltd