TMI Blog2014 (1) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... bills or invoices has not disallowed the entire expenses but only 1% of expenses - CIT(A) while upholding the order of AO has held that assessee has filed to furnish supporting evidences to establish that all expenditure incurred were wholly and exclusively for business purposes - AO has not disallowed the entire expenses but only 1% which has been upheld by CIT(A) for the reason that no details were filed by assessee - there was no reason to interfere with the order of CIT(A – Decided against Assessee. - ITA No.1462,1463/Ahd/2010 - - - Dated:- 5-4-2013 - G C Gupta and Anil Chaturvedi, JJ. For the Appellant : Shri Sunil H Talati For the Respondent : Shri Sumit Kumar, DR ORDER:- Per: Anil Chaturvedi: Both these appeals have been filed by the Assessee arising from the separate orders of ld.CIT(Appeals)-V, Baroda dated 15/12/2009 08/12/2009 respectively for A.Ys. 2001-02 2002-03. Since the issue (1st ground) involved in both the appeals is identical, therefore for the sake of convenience, the same are disposed of by a common order. 2. The facts as culled out from the orders are as under (lead AY 2001-02):- 2.1. Assessee is a company engaged in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: 4.2. On careful consideration of the matter, I find that the issue involved is not with regard to the reasonableness of the expenditure but relates to genuineness of payment for the purpose of business expediency. It has transpired from the records that the appellant has failed to bring evidence regarding the services rendered by Ms. R.B.Tanna. Allegedly the services rendered by her includes the work of technical nature which includes the work of assisting the company in launching new medicines, which involve giving information about the new products to the medical representatives. This technical work requires technical qualification related with medical/computer fields for which Smt.R.B.Tanna does not appear to be technically qualified. Also she has not been produced for verification nor any new material evidences have been brought on record to prove that the payments made by way of consultancy charges were for business expediency only. In view of the above, I am of the considered view that the action of the AO was right in adding the consultancy charges of Rs.1,65,000/- to the total income. In view of the above, this ground of appeal is dismissed. 3. Aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he technical queries pertaining to our products that may be raised by various specialized doctors / surgeons when our field staff visits them. The consultant provides proper explanations to such queries with documentary supports. For SHAKUN PHARMA PVT LTD. Sd/- AUTHORISED-SIGNATORY Date: 16-06-2004 3.2. He further submitted that M/s.R.B.Consultants is associated with M/s.Shakun Pharma Pvt.Ltd. as an advisor for giving explanation and information about the medicines to medical representatives of the company and has been consultant to various other companies. He further submitted that services availed by the assessee are not in dispute and therefore, the AO was not justified in making disallowance of the amount paid to her. It was further submitted that Ms.R.B.Tanna is not a relative of any partner and thus not covered by the provisions of section u/s.40A(2)(b) of the Act and hence the addition made was not justified. 4. On the other hand, from the side of the Revenue, ld.DR Mr.Sunit Kumar appeared and submitted that Ms.R.B.Tanna is a Post Graduate in the field of Commerce but the services rendered by her included the work of technical nature. The technical w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the disallowance to Rs.80,000/- instead of Rs.1,80,000/- made by the AO. Thus, this ground of the assessee is partly allowed. 6. Likewise, for the same reasoning, for Asst.Year 2002-03 the disallowance is restricted to Rs.75,000/- as against Rs.1,65,000/- made by the AO. In this way, assessee gets a relief of Rs.90,000/-. Ground is partly allowed. 7. For Asst.Year 2002-03 (by way of ground No.3), the assessee had claimed marketing traveling expenses of Rs.80,610/-. It was in the nature of reimbursement of the marketing staff for the places visited by them. On verification of the some of the vouchers, AO noted that the claim is without any supporting bills or invoices. He thus disallowed 1% of marketing expenses and added a sum of Rs.80,610/-. Assessee carried the matter before the CIT(A) and CIT(A) vide paragraph No.5.2 upheld the disallzwance, reproduced below:- 5.2. I have perused the matter and arguments advanced by the AR as also the observation of the AO. It may be noted here that the AO has not disallowed the entire expenditure as claimed by the appellant, but only a part for the reasons elaborately discussed by him. The reasons are broadly, nature of visits, det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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