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2019 (6) TMI 772 - ITAT MUMBAINon-consideration of remand report by CIT(A) - HELD THAT:- We have noted that after recording the contents of remand report and the reply/objection of assessee, the ld. CIT(A) proceeded to adjudicate the various other grounds of appeal raised by assessee. In our view, the ground of appeal raised by Assessing Officer/revenue has no leg to stand that remand report was not considered by CIT(A). In the result, ground no.1 of the appeal is dismissed. Addition on account of fixed asset - failure to produce the original copy of bills for purchase of asset for verification of genuineness - CIT(A) deleted the entire addition holding that AO has given his remand report to justify the high pitch assessment - HELD THAT:- AO has specifically brought out the discrepancies in acquisition of various assets. The Assessing Officer has only accepted that invoices regarding furniture & fixtures are verifiable. Therefore CIT(A) is not justified in deleting the entire addition without specifying as to how the assets were put to use either before the date of purchase or installed within three days from shipping USA to Gurgaon, India. Thus, this ground of appeal is resorted to the file AO to consider the issue afresh after verification of the facts and the evidences about the acquisition of the asset and pass the order in accordance with law. Revenue's ground of appeal is allowed for statistical purpose. Adhoc disallowance @ 25% of various expenses - salary, contribution to various funds, Training & Seminar, Travelling & Conveyance, Facilities Maintenance, Utility Account Expenses, Freight Expenses and Recruitment & Relocation Expenses - revenue submits that during the assessment, the assessee has not substantiated the expenses nor furnished any documentary evidence to substantiate the expenses - HELD THAT:- We have noted that the AO has not disputed the genuineness and admissibility of expenses rather disputed that quantum of the expenses. AO during the remand report has not sought such explanation about the quantum of expenses from the assessee and in the remand report insisted to sustain the addition. In our view, without specifying the genuineness of expenses, the adhoc disallowance is not justified. Addition on account of Business Promotion & Advertisement Expenses, Legal & Professional Fees and Outsource Service Cost Expenses - CIT-A deleted the addition - HELD THAT:- For legal & professional expenses, the Assessing Officer in his remand report stated that assessee submitted part wise details of legal & Professional expenses incurred during the year along with the details of TDS. The assessee also furnished the all invoices of parties having major amounts. On verification of invoices and TDS, the Assessing Officer tried to justify the payment due to short deduction of TDS. The Assessing Officer has not doubted the genuineness of professional expenses. No adverse material was brought on record by Assessing Officer. Therefore, in absence of genuineness of legal and professional expenses, the 100% disallowance is not justified. For business promotion expenses assessee under this head, claimed expenses relating to the gift item. The assessee furnished invoices of parties having major amounts and invoices on sample basis for other parties. The Assessing Officer objected the allowance on the ground that no nexus of business activities and that business expediency have not been established and recommended 20% of disallowance. AO not doubted the genuinity and the identity of the recipient. AO has not examined the percentage of expenses vis-à-vis the business turnover of the assessee. The items on the assessee made expenses for business promotion consist of Pen holders, Printed folders, Leaflets, Pens, Mugs, Black Mugs and Boxes. In our view the assessee has made genuine business promotion expenses and the disallowance was not justified. For outsources service cost assessee furnished the details of training program and the breakup and details of the expenses along with the details of the participants, venue and date. The assessing officer suggested disallowing 25% of such expenses. We have seen that when the activity of the training program and the genuineness of the expenses is not doubted by the assessing officer no disallowances of such training of outsource service cost is justified. Assessee has paid the expenses to its associated enterprises, whose identity is not in dispute. AO was not justified in making such disallowance. - Decided in favour of assessee.
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