T.R. MEENA, AM This is an appeal filed by the assessee against the order dated 10/12/2013 passed by the learned CIT(A)-I, Jaipur, for A.Y. 2009-10. The respective grounds of appeal raised by the appellant are as under:-

1 On the facts and in the circumstances of the case ld CIT(A) has grossly erred in confirming the addition of Rs. 5,13,060/- on account of disallowance made of expenses incurred as application fee for allotment of liquor shop arbitrarily without considering the submissions made and evidences adduced before him. Hence the disallowance so sustained deserves to be allowed. ITA 188/JP/2014_ Prashant Tak Vs ACIT 2

1.1 That the ld. CIT(A) has erred in confirming the disallowance without appreciating the fact that the expenses was incurred for obtaining the liquor business and paid to government department in respect of which income would arise in further years to come and further is non refundable, thus expenses incurred on application fees is allowable as business expenditure. Hence the disallowance so sustained deserves to be allowed.

2. The assessee is involved in the business of purchase, sale and investment of shares and debentures. The assessee filed his return on 30/09/2009 declaring income at Rs. 10,90,450/-. The case was scrutinized U/s 143(3) of the Income Tax Act, (in short the Act). The ld Assessing Officer observed that the assessee had debited fees for application for getting Desi Madira contract and paid fees of Rs. 5,13,060/-. It was submitted by the assessee that liquor business is the parental business of assessee. The ld Assessing Officer held that the assessee had not given specific reasons for claiming these expenses. It is not a business of the assessee. As per Section 37 of the Act, the expenses can be allowed, which was incurred wholly and exclusively for the business purposes. Therefore, the expenses claimed on Desi madira retail shop are not allowable and same were added back in the income of the assessee.

3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the addition by observing as under:- ITA 188/JP/2014_ Prashant Tak Vs ACIT 3

4.1 So far as the Desi marida shop application fee amounting to Rs. 5,13,060/- is concerned, it is seen that this addition has been made by the A.O. as this expenditure was not related to the business of the appellant. It is seen that the appellant was carrying on business of share brokering in the name of M/s Maverick Shares Brokers Pvt. Ltd.. The expenditure incurred by the appellant as application fees was for obtaining country liquor business. This expenditure, therefore, has not been incurred in connection with an existing business. The business of share brokering is entirely different than what is being sought to be acquired by the appellant. As held by the Honble MP High Court in the case of Perfect Pottery (166 ITR 196) , in order to sustain a claim of deduction by way of business expenditure, the expenditure must have been incurred for the purposes of business which was in existence. Since there was no such business in the year under consideration, this expenditure incurred by the appellant cannot be allowed. The disallowance made on this account is, therefore, confirmed.

4. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that during the year under consideration, besides share trading business, the assessee applied for retail liquor shop, which is also a parental business. Since the said business is done under the close ITA 188/JP/2014_ Prashant Tak Vs ACIT 4 supervision and government regulations, therefore, as per government policy during the previous year relevant to A.Y. under appeal, the assessee had submitted total 102 applications for allotment of retail liquor shop and for each application fees for Rs. 5,030/-, thus total amount of Rs. 5,13,060/- was deposited by the assessee as non-refundable fees. Further as per requirement of the State Excise Department, earnest money of Rs. 2,19,81,800/- was also deposited by the assessee during the year under consideration through demand draft. The said amount of fees for allotment of liquor shop was non-refundable fees and had been forfeited whereas the assessee was not succeeded for lottery system of allotment of shop. The assessee could not succeed in procuring of allotment of liquor shops license, therefore, only earnest money was refunded to the assessee. Accordingly, the assessee had claimed application fees forfeited at Rs. 5,13,060/- U/s 37 of the Act as a revenue expenditure. He has further drawn our attention on Section 37 of the Act and argued that the assessee incurred these expenses for business purposes and allowable U/s 37 of the Act. He further relied on the decision in the case of Indian Molasses Co. P. Ltd. Vs CIT 37 ITR 66 (SC) wherein it has been held that if the expenditure incurred wholly and exclusively for the business purposes, which is allowable U/s 37 of the Act. He further relied on the decision in the case of ITA 188/JP/2014_ Prashant Tak Vs ACIT 5 Empire Jute Co. Ltd. Vs. CIT 124 ITR 1 (SC) wherein nature of expenses has been considered by the Honble Supreme Court. In the case of S.A. Builders Vs. CIT 158 Taxman 74 (SC) wherein it has been held that if the expenditure incurred on ground of commercial expediency, which allowable U/s 37 of the Act. Ld AR has further relied on the following case laws:- (i) (2011) 10 taxmann.com 18 (Delhi ITAT). (ii) Bharti Airtel Ltd. Vs ACIT 48 DTR 416 (ITAT Mumbai Bench). (iii) CIT Vs. Madras Auto Service (P) Ltd. 233 ITR 468 (SC) Therefore, he prayed to delete the addition.

5. At the outset, the ld DR has vehemently supported the order of the ld CIT(A).

6. We have heard the rival contentions of both the parties and perused the material available on the record and gone through the case laws cited by the assessee. The assessee is in the business of purchase and sale of shares, investment of share and debentures. The assessee paid Rs. 5,13,060/- as application fees for obtaining Desi Madira retail shop during the year under consideration but the assessee could not be succeeded in getting the retail shop license. The liquor business has not started during the year under consideration in absence of license. The assessee claimed ITA 188/JP/2014_ Prashant Tak Vs ACIT 6 these expenses against the income of share brokering during the year under consideration. As per Section 37 of the Act, any expense can be claimed by the assessee in the P&L account only incurred wholly and exclusively for the purpose of business. The assessees business was not running of Desi Madira retail shop during the year, which is not related to the main business of the assessee at all. The assessee had not discharged burden of proof lies with him. The case laws referred by the assessee are not squarely applicable as in case laws cited by the assessee were in the same business during the year under consideration. Therefore, we confirm the order of the ld CIT(A).

7. In the result, the assessees appeal is dismissed. Order pronounced in the open court on 14/12/2015. Sd/- Sd/- vkj-ih-rksykuh Vh-vkj-ehuk (R.P.Tolani) (T.R. Meena) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 14 th December, 2015 *Ranjan vknsk dh izfrfyfi vxzsfkr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Shri Prashant Tak, Jaipur.

2. izR;FkhZ@ The Respondent- The ACIT, Circle-3, Jaipur.

3. vk;dj vk;qDr@ CIT ITA 188/JP/2014_ Prashant Tak Vs ACIT 7

4. vk;dj vk;qDr@ CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 188/JP/2014) vknskkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar