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2018 (6) TMI 1555 - AT - Income TaxAddition @5% to the total turnover - inflation of expenses - Held that:- No details of financials of the assessee were filed before the Tribunal. While summarising the facts in the Cross Objection, the submission of the assessee is that the Assessing Officer made addition of ₹.6,41,04,662/- being 5% of the turnover is also factually wrong since 5% of the total turnover is only ₹.6.1 crores [₹.122 crores x 5%]. Since there is variation in the profit declared by the assessee in the assessment year under consideration compared with previous year, it cannot be ruled out that the assessee has not inflated the expenses and the same is determined by the Assessing Officer at 5% is also in higher side. Accordingly, we direct the Assessing Officer to adopt 2.5% of the total turnover may be disallowed towards inflated expenses. - Decided partly in favour of revenue Nature of expenditure - Disallowance of exhibition expenses - Revenue or capital expenditure - Held that:- The corporate advertisement expenses, exhibition expenses, public relation expenses, cultural programme expenses, quota expenses and sales promotion expenses are revenue in nature and cannot be held as capital. Moreover, in the present case, the Assessing Officer has not recorded any findings that there was revenue generation against the exhibition expenses or such expenses created any tangible or intangible asset to the assessee. Accordingly, the ground raised by the Revenue is dismissed.
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