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2018 (4) TMI 1608 - AT - Income TaxDisallowance under the head rebate & discount u/s 40(A)(2)(a) given to sister concern - Held that:- Since the assessee has credited the amounts as noted above into the account of the consignment agent, M/s. Vrinda International, the proprietary concern of one of the assessee’s partners, as rebate and discounts and has claimed this expenditure to have been made for the purpose of business, in our opinion, the Assessing Officer was justified to observe that the assessee has made such payments of expenditure claimed which are dis allowable under the provisions of section 40A(2)(a) of the Act. - Decided against assessee. Deduction of expenditure deposited as custom duties with the Custom Department under the head “duty clearance and freight” - Held that:- The entire material available on record and we find that the ld. CIT(A) while giving relief to the assessee has considered the facts of the issue in right perspective. He has made an elaborate discussion in the impugned order and has also relied on various decisions on the subject, against which no counter case is laid before us on behalf of the Revenue. The ld. CIT(A) has properly rebutted all the objections raised by the Assessing Officer and after verification has found that the amount paid by assessee was towards custom duties paid and not with respect to any fine or penalty. In our opinion, the ld. CIT(A) has passed a reasoned order which needs no interference at this stage. Accordingly, this ground of Revenue’s appeal deserves to be dismissed. Disallowance u/s. 40A(2)(a) on account of commission paid to M/s. Vrinda International - Enhancement of income without affording any opportunity of hearing to assessee - Held that:- We find that the ld. CIT(A) has mentioned that income of the assessee is enhanced by ₹ 3,28,073.25 after hearing the objections of the appellant. However, no fact regarding issuance of any notice to the assessee by the CIT(A) or any objection of the assessee on it or finding of the ld. CIT(A) on any such objection is found recorded in the impugned order. Therefore, the plea of the assessee that enhancement in income has been made without affording any opportunity of hearing is found acceptable and thus, the action of the CIT(A) being in violation of section 251(2) of the Act cannot be approved. Accordingly, this ground of assessee is allowed. Adhoc disallowance of expenditure under different heads - Held that:- We find from the assessment order that the assessee failed to furnish any supporting evidence with respect to these expenditure. For want of any vouchers etc. the adhoc disallowance made to the extent of 10% of the total expenditure claimed, cannot be said to be unjustified, as in such cases, element of personal use cannot be ruled out in the expenditure incurred on vehicles and telephone etc. In presence of these facts, the decisions relied by the assessee are found not applicable. - decided against assessee.
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