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2015 (12) TMI 191 - AT - Income TaxAddition on account of undisclosed receipts - Held that:- In the present case the AO has not doubted the books of accounts as he has not rejected the same. Secondly, he has compared two audit reports and taken the higher figures from both the accounts accompanying the audit reports. The AO, first of all, has not given any finding which is the correct state of accounts as audited by two Chartered Accountants despite the fact that he has examined both the Chartered Accountants. It is also a fact that the assessee has produced complete address of the party SWDL and TDS certificates issued by that party clearly reveals that the total receipts are at ₹ 2,14,70,195/- as against the total receipt adopted by AO ₹ 2,93,30,087/-. The assessee has produced complete bills issued by SWDL and payments are received by cheque through bank accounts. The assessee filed before the authorities concerned all the books of account reflecting the receipts from SWDL and in that case it was the duty of the authorities to definitely come to one conclusion or the other in regard to the reliability of everyone of the relevant account filed by the assessee. In the absence of any such finding, it was not open to them to pick and chose one receipt or the other, which are more favourable to the revenue. They could accept the assessee's explanation or reject them or they could check the entries therein with reference to the books of account. But they have not done none of these things. Accordingly, the assessee's audit report as filed along with the return of income as audited by M/s. Anurag Mathur & Co. is the correct accounts for the reason that the receipts disclosed therein are matching with the TDS certificates issued by SWDL and also with the bills raised. Accordingly, we delete the addition - Decided in favour of assessee. Disallowance of commission - Held that:- In the immediate preceding year i.e., assessment year 2003-04, the assessee was engaged in the same business and also taken services from the said parties and paid commission to them and no disallowance was made by the AO originally, but again case was reopened by issuing notice u/s. 148 read with section 147 of the Act on the basis of information that one of the parties Umang Credit Capital Ltd., the transaction had not been reflected in its Trading & P&L Account and transaction had been denied by this party. Accordingly, commission paid to these parties were disallowed but CIT(A) vide his appellate order dated 20.11.2012 considered all the aspects and acknowledged the services rendered by these parties and allowed the payment of commission except in the case of M/s. Dave Commercial Co. In view of these facts and circumstances of the case, we are of the view that that, since there is no change in the facts in the present case for the relevant assessment year in comparison to earlier AY 2003-04, as far as this issue is concerned and hence, the revenue should not have taken different conclusion than allowing the payments except in the case of M/s. Dave Commercial Co. We direct the AO to restrict the disallowance to the extent of this party i.e., M/s. Dave Commercial Co. only. We direct the AO accordingly. - Decided partly in favor of assessee. Disallowance of business promotion expenses - Held that:- We find that exactly similar expenses on account of business promotion was allowed in immediately preceding assessment year 2003-04 by the AO himself. The AO in the immediately preceding year has clearly held that these are business expenses relatable to the business of the assessee for the reason that the assessee being the sale coordinator for supplies to Canteen Stores Department (of Military Wing) from SWDL and such expenditure is allowable as business expenditure. Thus hese expenses are allowable expenditure, first on the principles of consistency and even otherwise the CIT(A) has admitted the expenses to be business in nature but disallowed 50% on the basis of estimate. That cannot be the basis for disallowance. Accordingly, we delete the disallowance - Decided in favour of assessee.
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