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2014 (7) TMI 335 - AT - Income TaxShow room renovation/repair expenses – Held that:- CIT(A) was rightly of the view that the assessee and on perusing the copies of the bills has given a finding that the expenditure incurred by the Assessee was by way of replacement/repairing of old existing furniture and fixtures and modification made to facilitate the display of changed models of products of companies which are sold by Assessee – revenue could not controvert the findings of CIT(A) and thus we find no reason to interfere with the order of CIT(A) – Decided against Revenue. Disallowance of interest u/s 36(1)(iii) of the Act – Held that:- CIT(A) noted that the furniture deposit was old amount given to Sales India and M/s Santosh Trading for using the existing furniture of these concerns without payment of rent - the deposits have been given for the purpose of business and there was no justification of disallowing the notional interest – revenue could not controvert the findings of CIT(A) and therefore there was no reason to interfere with the order of CIT(A) – Decided against Revenue. Advertisement expenses u/s 40A(2)(b) of the Act – Held that:- CIT(A) noted that the similar expenditure paid for advertisement to Arts India has been allowed in the preceding years in scrutiny assessment except in A.Y. 90-91 where disallowance of 25% was made by AO but the same was deleted by CIT(A) - nothing has been brought on record to demonstrate that against the order of CIT(A) for A.Y. 90-91- no material has been brought to demonstrate as to how the payment made by Assessee to Arts India was excessive – revenue has not brought any material on record to controvert the findings of CIT(A) – there was no reason to interfere with the order of CIT(A) – Decided against Revenue. Unexplained expenditure on advertisement u/s 69C of the Act – Held that:- CIT(A) while deleting the addition has noted that the information gathered by the AO u/s. 133(6) from various newspapers was not made available to the Assessee nor any explanation was sought from Assessee and therefore the question of giving any justification by the Assessee does not arise - on perusing the account of Arts India that the payments received by Arts India could have been for the year under consideration as well as old outstanding dues since there was opening credit balance shown as payable by the Assessee and there was balance outstanding at the close of the year - in the absence of proof of incurring expenditure out of the books by the Assessee, no case of addition u/s. 69C has been made by the AO - Revenue has not brought any material on record to controvert the findings of CIT(A) – thus, there was no reason to interfere with the order of CIT(A) – Decided against Revenue.
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