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2015 (9) TMI 848 - HC - Income TaxDisallowance made on account of business promotion expenses u/s 37(1) - ITAT deleted the addition - Held that:- The Tribunal has recorded a factual finding that most of the items were found from the books of accounts not to be personal expenditure, but to be business promotion expenses. Therefore, the first question of law raised by the Revenue does not arise for consideration in the light of the factual finding that the expenses were found to be business promotion expenses. - Decided against revenue. Diversion of profits - raw material supplied to sister concern were at a lower rate when compared to others - ITAT deleted the addition - Whether the finding of the Tribunal that the disallowance made under Section 40A(2)(b) is not attracted especially when the assessee had supplied its entire product to its sister concerns at exorbitant price thus bring down the profit of the assessee company? - Held that:- In this case, the Tribunal found that the only reason as to why the Assessing Officer came to a conclusion about the excessive or unreasonable nature of the expenditure was on the basis that the net profit amounted to only 0.13% of a massive turnover of about ₹ 103 crores. On such a premise, the conclusion that the expenses incurred were excessive or unreasonable could not have been arrived at. This is why, the Tribunal pointed out there are no materials to come to the conclusion that any particular item of expenditure was expensive or unreasonable. - No substantial questions of law raised - Decided against revenue.
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