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2016 (3) TMI 547 - ITAT CHENNAIDisallowance of incentives to Dock Labour Board Workers - CIT(A) directed the Assessing Officer to restrict the disallowance to 15% only - Held that:- Expenditure is incurred as a regular practice in the business of forwarding and clearing agencies at Dock and Ports for loading and unloading of goods and claimed as General and Miscellaneous expenses necessarily for the purpose of conducting business. The Revenue has accepted 15% disallowance in the earlier years and has attained finality. The ld. Commissioner of Income Tax (Appeals) has examined the findings of the Assessing Officer and submissions of the assessee and relied on the Jurisdictional High Court decisions which are acceptable. Therefore, we are not inclined to interfere with the order of Commissioner of Income Tax (Appeals) on this ground and accordinlgy ground of the Department is dismissed. - Decided against revenue Disallowance of Business Promotion Expenses - CIT(A) treated expenditure as business expenses and deleted the addition - Held that:- We are of the opinion that the magnitude of business is high and to develop business relations, it is common to incur expenditure on foreign visitors. Therefore, we do not interfere with the order of Commissioner of Income Tax (Appeals) on this ground and uphold the same. - Decided against revenue Disallowance of subscription to associations - CIT(A) deleted the addition - Held that:- We after hearing the rival submissions and perusal of subscriptions details paid to the Associations for improving business prospects in domestic and international markets and also participation fees paid to various seminars and conference and we confirm the order of Commissioner of Income Tax (Appeals) in deleting the addition - Decided against revenue Disallowance of motor car expenses - Held that:- We are of the opinion that the assessee firm maintaining large fleet of cars to the hierarchy of management and assessee disallowed expenditure on two cars which is not disputed but on remaining cars the assessee fails to maintain log book and not produced evidence in assessment proceedings and there is a scope for element of personal usage considering the luxury sedans. Therefore we set aside the order of Commissioner of Income Tax (Appeals) on this ground and confirm the order of the Assessing Officer in making disallowance - Decided against assessee Disallowance of foreign travel expenses - Held that:- We remit the issue to the file of the Assessing Officer to verify the genuiness of documents and pass the order.- Decided in favour of revenue for statistical purpose. Disallowance of interest - Held that:- We after hearing the submissions, found that assessee could not submit these details in the assessment proceedings and also not demonstrated with fund flow statement to prove that there are adequate funds available with the firm. Therefore, we set aside the disputed issue to the file of the Assessing Officer who shall verify fund flow statement based on the capital account and balance sheet of the firm and allow deduction after examination - Decided in favour of revenue for statistical purpose. Addition on account of difference in receipts as per clients account - Held that:- We are of the opinion considering the submissions and material produced and the circumstances and the type of clients and the nature of expenditure and accounting treatment which the Assessing Officer was denied the opportunity of verification in the assessment proceedings. Therefore, we remit this issue to the file of the Assessing Officer for verification and examination. The Assessing Officer shall pass the order on merits after providing opportunity of being heard and in accordance with law - Decided in favour of revenue for statistical purpose. Addition of amount payable to Madras Port Trust - Held that:- the fact that the assessee has collected storage charges as per the directions and due to High Court stay in Writ Petition the amount could not be refunded and the outcome of the Writ Petition is pending and there is a liability falling on the assessee firm to discharge. We are of the opinion on the current circumstances, the assessee shall be allowed deduction on payments based on the outcome of the High Court decision and so far as this assessment year is concerned, we do not interfere with the Commissioner of Income Tax (Appeals) findings on this ground, and accordingly uphold the order of the Commissioner of Income Tax (Appeals). - Decided in favour of assessee Disallowance 15% of receipts representing the expenditure reimbursed by the clients - Held that:- The matter needs to be examined and reimbursement does not take the character of income. Therefore, we set aside the order and direct the Assessing Officer to consider the issue in dispute after reconciliation and pass orders and allow the appeal of the assessee for statistical purpose.
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