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2015 (7) TMI 87 - AT - Income TaxDisallowance of Sales promotion and publicity expenses - Held that:- Facts about assessee’s regular maintenance of accounts, their non-rejection, diverse business activities, contentions, applicable case laws and past litigation history is narrated in details above and needs no repetition. We are inclined to allow grounds raised by assessee relating to retention of disallowances by ld. CIT(A) in all these years on following considerations. i. All disallowances have been allowed in favor of the assesse by ITAT in A.Ys. 1992-93 to 1997-98, 2000-01 and 2001-02 a gist of the orders of the ITAT orders in this behalf finds place onPB 47-50. Series of orders of this bench in assessee’s own case are to be respectfully followed. ii. In addition to above, for AY 2004-05 also the other additions/disallowances stood allowed to assesse and issue of 5% disallowance out of sales promotion was set aside by ITAT for fresh consideration. Ld. CIT(A) in 2nd round of proceedings allowed these expenses by latest order Dtd 29-1-14 in fresh proceedings. Revenue has accepted this order and has become final. iii. Assessee’s books of accounts are maintained regularly on day to day basis and are duly audited; there is no qualification or any material adverse remark by the chartered accounts. iv. Assessee’s books of accounts have not been rejected much less even doubted. v. In view of a series of favorable orders in assessee’s own cases on these issues we are of the view thatthey are no more res integra. vi. Principle of ‘Consistency’ as enunciated by Hon’ble Supreme Court in Radhasoami Satsang (1991 (11) TMI 2 - SUPREME Court) is fully applicable to the assessee’s case which has been reconfirmed by Hon’ble Supreme Court in CIT v Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT] vii. The Hon’ble Gujarat High Court in the case of Sayaji Iron and Eng. Co. (2001 (7) TMI 70 - GUJARAT High Court ) is applicable to disallowance retained alleging personal user by the company. Respectfully following it we hold that in the case of assesse being a limited company which is an inanimate person, there can be no personal expenditure. Consequently the disallowances attributed to be personal user cannot be justified and are deleted. viii. For AY 2006-07 qua the same disallowances assesse has paid more Fringe Benefit Tax (FBT). As over FBT and IT provisions if any expenditure is taxable under FBT it cannot be disallowed again in Income Tax provisions. - Decided in favour of assessee. Disallowance of ‘Marketing and Survey expenses’ - Held that:- As the facts emerge the record and evidence in this behalf has surfaced in piece meal and from time to time as the assessee attempted to fill in the gaps about inferences drawn by the authorities from time to time. Consequently a cohesive verification of material appears to be not made. Assessee has produced the income tax record of the survey agencies which in support of its version; there exist no reasoning as to why they are being ignored by ld. AO & CIT(A). There exist conflicting claims about the existence of such survey agencies coupled with non supply of Inspectors report and non-allowing the customary right of cross examining the denying witnesses. Thus assessee has made out a case for violation of principles of natural justice. In the entirety of facts and circumstances we are inclined to set aside the issues relating to Marketing and Survey expenses back to the file of AO to decide afresh after considering the entire evidence and giving the assessee an adequate opportunity of being heard. - Decided in favour of assessee for statistical purposes. Additional depreciation - whether the activity carried out by assessee i.e. printing and publishing newspaper does not amount to manufacture or production within the meaning of section 32(1)(iia)? - Held that:- news papers and periodicals are distinct commodity than the paper, printing ink and other ingredients used therein. Since a new commercial product comes into existence, the process involved for such transformation amounts to production and manufacture. Our view is fortified by Hon’ble Delhi High Court and ITAT benches of Cochin and Ahmedabad. Respectfully following them we uphold the orders of ld. CIT(A) on this issue of additional depreciation. Apropos AY 2006-07, since relying on Sayaji Iron and Engg. Case (supra), we have already held that, there can be no attribution of personal user in case of a limited company, the order of ld. CIT(A) deleting the disallowance of depreciation in this behalf is upheld. Revenue appeals are thus dismissed.- Decided in favour of assessee
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