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2016 (1) TMI 719 - AT - Income TaxAddition of an expenditure for Business/Sales promotion Expenses - Held that:- From a perusal of the statement, it is clear that the assessee has filed complete details of the bills and vouchers in respect of the entire sales promotion expenses. The CIT(A)'observation that the appellant had produced all bills relating to sales promotion except to the extent of ₹ 1,38,32,946/- is there fore incorrect. It is further noticed that in respect of payment made to P.A.Time Industries, no bills and vouchers have been filed. The payments to this party totalling ₹ 8,70,000/- is negligible compared to the volume of expenditure incurred by the assessee under this head. Even in respect of this expenditure the payment in question has been made by account payee cheques. A perusal of the bills and vouchers shows that the expenditure in question has been incurred on purchase of gift items. Thus it is clear that the assessee has established incurring of business promotion/sales promotion expenses. AO/CIT(A) have not given any valid basis as to why these expenses should not be regarded as permissible deduction. CIT(A) having accepted that the expenditure in question is wholly and exclusively for the purpose of business of the assessee ought to have allowed the entire deduction. He ought not to sustained part of the addition on a wrong assumption that bills in relation to a part of the expenditure were not filed by the Assessee and on this basis sustained part of the disallowance made by the AO. - Decided in favour of assessee. Disallowance of expenses in respect of 17 non-operational branch offices - CIT(A) deleted the addition - Held that:- the expenses in question were incurred for upkeep and functioning of the branches and had to be allowed as deduction. We are of the view that in the light of the facts as brought before CIT(A) the addition was rightly deleted by CIT(A). - Decided in favour of assessee.
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