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2016 (3) TMI 76 - AT - Income TaxUndisclosed income u/s 69A - cash receipts found and impounded during the course of survey action - Held that:- we are of the considered opinion that the ld. CIT (A) erred in upholding the conclusion of the AO based only on the admission during survey made by Shri Suri at the wee hours (i.e. between 3.00 AM – 4.00 AM) to fasten the liability when Shri Suri was able to explain and reconcile the receipts. The AO did not bother to enquire into the veracity of the explanation given by the assessee. The AO could have easily called for details from the branches of the assessee at Janakpuri and tested the explanation given by the assessee in respect to interbranch transfer of cash to the Head Office, without doing so, the addition made solely on the basis of admission during survey cannot be upheld as held by the Hon’ble Supreme Court in CIT vs. S. Khader Khan Son (2013 (6) TMI 305 - SUPREME COURT) and CIT vs. Dhingra Metal Works (2010 (10) TMI 29 - DELHI HIGH COURT ). Therefore, the orders of the lower authorities are bad in law and are set aside on this issue. - Decided in favour of assessee Disallowance of advertisement expenses - similar expenses were disallowed and offered for taxation in earlier years - Held that:- We find that the assessee had produced the ledger and bills of the advertisement expenses before the lower authorities below and explained that entire expenditure has been incurred wholly and exclusively for the purpose of business. The AO has not pointed out any discrepancy or any reason explained even inadmissible in the nature as per section 37 of the Act. Just because the assessee has not offered for tax in the previous years, it cannot be the ground for disallowing the expenses. It should be remembered that there is no estoppel against the law. It is a trite law that if the expenses are wholly and exclusively for the purpose of business or profession and if it is not a capital expenditure or personal expenditure then the expenditure need to be allowed. From the ledger of the advertisement expenditure (Pages 163 to 168 of PB), we find that the assessee company had incurred advertisement expenditure on advertising the same in newspapers and magazines. In the light of the fact that there were no other justifiable reasons given by both the authorities below to disallow the advertisement expenditure, cannot be countenanced. Therefore, we delete the addition made by the authorities below - Decided in favour of assessee
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