Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (4) TMI 568 - AT - Income TaxDisallowance of advertisement and sales expenses - Disallowance of miscellaneous expenses - Adhoc disallowance of expenses Held that:- The disallowance made by the AO is adhoc disallowance without pointing out any defect in the claim of the assessee - Such course of action cannot be adopted by the AO if assessee has maintained proper accounts which are audited, then the AO, without either rejection of books of accounts or without pointing out any defect in the expenses cannot make an adhoc disallowance - disallowance cannot also be deleted simply for the reason that the accounts of the assessee are audited and there is no adverse comment of the auditor in the audit report - The expenses claimed by the assessee for the purpose of business were subject to examination by the AO and expenses can be claimed only if they have been incurred wholly and exclusively for the purpose of business - CIT(A) has wrongly deleted the addition without recording a finding that the expenses are verified to be incurred for the purpose of business of the assessee thus, the matter is required to be remitted back to the AO for fresh adjudication Decided in favour of Revenue. Transfer pricing adjustment - Royalty payment made Held that:- In subsequent years the assessee had submitted the calculations regarding calculation of net domestic / export sales for the purpose of calculating the payment of royalty and described that if the royalties calculated on the basis of agreement of the assessee with Dow Netherland then royalty paid by the assessee will be on lower side and such contention of the assessee has been accepted by the TPO - out of export as well as local sales the cost of imported goods have been reduced and net sales have been computed accordingly, on which royalty payable is calculated - For the year under consideration the computation is made in the similar manner and it has been shown that overall the assessee has paid less royalty as compared to royalty paid by UK AE to Dow Nether land thus, there is no reason to interfere in the order of the CIT(A) Decided against Revenue.
|