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2012 (11) TMI 177 - AT - Income TaxSales Promotion Expenses – alleged that assessee could not furnish any details to prove the business expediency and could not discharge its onus to prove that it was incurred for business purposes, the expenses was disallowed – Held that:- Assessee is engaged in the business of advertising agency. The assessee has incurred the expenses is not in dispute - since the expenses have been incurred for the purpose of business the expenses should be allowed as deduction - for verification matter remitted back to the file of the A.O Disallowance of Prior Period Expenses for commission – alleged that the bills pertain to F.Y. 2006-07 – Held that:- liability for commission crystallized during the F.Y. 2007-08 - debit note issued by Mr. Ravindra Raja is dated 10-5-2007, the payment has been made in the current year and TDS thereof has also been deducted before making the payment - expenses pertains to the current year and are therefore, allowable. - addition deleted – In favor of assessee Disallowance of prior period expenses for commission out of commission paid to Shri S. Hussain – assessee submitted that due to clerical error at the time of making data entry the period mentioned in the ledger was F.Y. 2006-07 instead of F.Y. 2007-08 – Held that:- Payment was made during the current year and TDS was also deducted before making the payment - expenses pertains to the assessment year under consideration and the same should accordingly be allowed - addition deleted – In favor of assessee Disallowance of expenses - addition made on account of electricity charges, generator hire charges, maintenance charges for bus shelters and salary to staff of Hyderabad – Held that:- Method of accounting adopted by the assessee is undisputed and its acceptance by the department is also undisputed - assessee has been consistently following the method of accounting of debiting the expenses from March to February. It is not the case of the Revenue that by following this method the profits are understated. All these expenses are of routine in nature and is paid month after month - disallowance is not called for Disallowance of municipal taxes – alleged that expense was for the period upto July, 2008 – Held that:- Amount was paid towards Municipal taxes and was covered by the provisions of section 43B of the Act - Since the amount has been paid during the current F.Y. same be allowed - addition deleted Disallowance - payment for maintenance charges - contravention of the provision of Section 40A (3) – Held that:-As per section 40A (3), expenses are to be disallowed, if the payment over Rs.20,000/- is made in cash. In the present case, the payments comprises of various purchases from different parties and are in the nature of reimbursement. The only payment of Rs.18,520/- is to Mr. Shamim, Choudhary and Roy Associates that too is within the limits prescribed u/s. 40A(3) - no disallowance is called for
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