TMI Blog2018 (1) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... er. In the result we do not find any reason to confirm the orders of the lower authorities. Therefore we reverse the finding of the lower authorities and the direct the Ld. assessing officer to delete the disallowance of ₹ 25 Lacs out of the power and fuel expenditure. In the result ground No. 1 of the appeal of the assessee is allowed. Addition on account of meeting and conference expenses - Held that:- The assessee has incurred these expenditure for the purpose of business of the assessee and also given a detailed reason thereof. Furthermore, the assessee has submitted the requisite detail before the AO. The AO has not stated that what details have not been submitted and if the details have not been submitted by the assessee then expenditure should have been disallowed to that extent. The Ld. assessing officer has made the ad hoc disallowance, without pointing out any instances of the expenditure for which the information is not made available by the assessee. Therefore the disallowance made by the Ld. assessing officer and confirmed by the Ld. CIT (A) cannot be sustained. In the result ground No. 2 of the appeal of the assessee is allowed. Disallowance u/s 40 A(3) - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd that the items so purchased by the appellant company from these suppliers (i) are duly recorded in the books of accounts of the company, kept and maintained in regular course of business, (ii) entered in the boundary of State of Uttar Pradesh on the basis of UP Sales Tax Road Permit Form No. 31‟ issued for each purchase, (iii) item so purchased were consumed in the production of the Company and (iv) these purchases have been accepted by the UP. Sales Tax Authorities in its assessment order. 2. That the Ld. CIT(A) has further erred in law and as well as on facts in sustaining the adhoc disallowance of ₹ 4,00,000/;. pn account of meeting and conference expenses ignoring the fact that the expenses incurred during the year under this head are just 0.16% as against 0.166% in the preceding assessment year. 3. That the Ld. CIT (A) has further erred in law as well as on facts in sustaining the disallowance of Rs. j^5Qkii/s_4QA (3) of the Act, ignoring the fact that the transportation expenses incurred for purchase of goods were paid to the transporter (standalone transaction during the year) and medical expenses reimbursement to its staff on the day of Holiday w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed the order in accordance with the law. We clarify that the entire assessment is not to be done de novo but only those issues are to be reconsidered which are agitated before the tribunal. In doing so, the AO shall give due opportunity of being heard to the assessee and assessee shall be at liberty to adduce any evidence it feels necessary. 5. Considering the above direction, Ld. assessing officer passed an assessment order under section 143 (3) on 29/11/2006, making additions with respect to a. ₹ 25 Lacs out of power and fuel expenses and purchases from 3 parties, b. disallowance of ₹ 1 lakh out of expenses of meeting and conference under section 37 of the Income Tax Act and c. disallowance of ₹ 58950/ under section 40 A (3) of the Income Tax Act, 1961. 6. The Ld. CIT (A) decided the issue as per order dated 18/10/2010 dismissing the appeal of the assessee. He confirmed disallowance of ₹ 25 Lacs in respect of unexplained purchases of power and fuel from one party, namely M/s carton India Ltd out of 3 parties in view of Lack of verifiability and confirmation from the party, as discussed by the Ld. Assessing Officer in his asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee has purchased goods from these parties which are showing the description of the material purchased as well as the quantity purchased. The bills also shows the address of the parties which are available with the assessees as well as the respective telephone numbers. In all the bills the material receipt stamp was also shown. He also mentioned that all the bills have the stamp of the sales tax authorities at respective check posts. He further submitted that there is no doubt expressed by the AO about the purchase price paid to them. He submitted that assessee has also submitted the confirmation of the above parties sent by those parties directly to the assessing officer and merely because there are some differences in the address as well as the reference number the addition have been made in the hands of the assessee. He further stated that the above parties have been paid purchase consideration through account payee cheques. He further drew our attention to the form No. 31 issued by the respective parties wherein the complete details of purchases from these parties have been mentioned. In the end he submitted that disallowance has been made by the Ld. assessing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore we reverse the finding of the lower authorities and the direct the Ld. assessing officer to delete the disallowance of ₹ 25 Lacs out of the power and fuel expenditure. In the result ground No. 1 of the appeal of the assessee is allowed. 10. The Ld. assessing officer has disallowed a sum of ₹ 1 lakh on account of meeting and conference expenses ignoring the fact that the expenses incurred during the year under the said are just 0.16% as against 0.1616% in the earlier years. During the year assessee has incurred an expenditure of ₹ 899601/- on account of various meetings, conferences, gifts and presents etc. However before the Ld. assessing officer the assessee has failed to furnish complete details of these expenses like payments to clubs etc. Assessee also failed to substantiate that these expenses are incurred for the business purposes. Therefore, the disallowance of ₹ 1 lakh was made by the Ld. assessing officer. Before the Ld. CIT the assessee reiterated the same submission and therefore the Ld. CIT (A) has confirmed the disallowance. 11. The Ld. authorised representative repeated the same arguments which were raised before the Ld. assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment in excess of the amount specified and could not also justify the claim of the assessee that such payment falls under the exception covered under rule DD of the Income Tax Rules, 1962. In view of this, we do not find any infirmity in the order of the Ld. assessing officer in making the above disallowance of ₹ 48650/ . In the result ground No. 3 of the appeal of the assessee is dismissed. 16. In the result appeal of the assessee in ITA No. 1316/Del/2012 is partly allowed. 17. Now we come to the appeal of the Revenue in ITA No. 669/Del/2014 is against the order of the ld CIT(A) dated 28.11.2013 deleting the penalty u/s 271(1)(c) levied by the ld Assessing Officer vide order dated 27.03.2012 of the ₹ 1172400/-. 18. Ld DR relied upon the order of the ld Assessing Officer and ld AR relied upon the order of the ld CIT(A). 19. As by the order in ITA No. 1316/Del/2012 the addition of ₹ 25 lacs with respect to power and fuel expenses and ₹ 1 lac out of meeting expenses have been deleted. Therefore, penalty to that extent even otherwise does not survive. 20. Therefore, only addition which has been sustained is of ₹ 48650/- u/s 40A(3) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
