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2023 (8) TMI 913 - ITAT MUMBAIRectification of mistake u/s 154 - addition of sales promotion expenses - Debatable issue - HELD THAT:- On perusal of column ‘Broad Nature of Expenses’ of the table forming part of Paragraph 4 of the Rectification Order (reproduced hereinabove), it was not apparent the all the sales promotion expenses were incurred on freebies. To the contrary, the broad nature of expenses given in the table suggested that the sales promotion expenses were not in the nature of freebies such as ‘Market Research Fee’, ‘Off Supplies Puch (Sales Promotion)’, ‘Printing & Reproduct (Sales Promotion)’, and ‘Documentation Books (Promotional Expenses)’. The balance expenses could have included expenses on freebies. This was a matter of investigation as it was not apparent that the sales promotion expenses was incurred on freebies. Thus, the issue of allowance of sales promotion expenses (including freebies) in the hands of the Appellant was debatable and required investigation and arguments on facts and in law. Thus, it cannot be said that allowance of deduction of sales promotion expenses by the AO resulting in a mistake apparent on record. Therefore, absent mistake apparent on record, the action of the AO fell beyond the scope of Section 154. Accordingly, order passed by the AO u/s 154 is quashed. Appeal of assessee allowed.
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