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2019 (4) TMI 1798 - AT - Income TaxDisallowance of web advertisement expenses - Allowable business expenditure - HELD THAT:- AO has merely taken as a support material of the statement of Shri SK Gupta dated 13/12/2006 during the course of search proceedings on Sri SK Gupta. Therefore, it is totally incorrect for CIT Appeal to have mentioned that the AO has made the addition on the basis of statement of Shri SK Gupta and A O has not granted an opportunity of cross-examination to the assessee. Even otherwise, the addition has not been made solely on the basis of the statement of Sri SK Gupta, but for the reason of failure of assessee to produce even the basic details about the claim of the expenditure as well as the ownership and use of the software. Further the learned CIT – A, was swayed by the fact that the assessee has made payment by account payee cheques. It is a matter of common knowledge that whenever there is an allegation of accommodation entries the transactions are always through account payee cheques. Bogus software purchase and claim of depreciation - Issue squarely covered against the assessee by the decision of the honourable Delhi High Court in case of Chintel [2017 (7) TMI 746 - DELHI HIGH COURT] wherein the assessee could not prove the purchase of the software as genuine transaction as it was also developed by an entry operator controlled company, the honourable Delhi High Court confirmed the disallowance of depreciation on the same Disallowance u/s 40A (2) (b) - excessive and unreasonable a high salary paid to the managing Director as well as the joint managing director - CIT – A deleted the disallowance because the managing Dir was also paid salary in earlier year also and she is a qualified professional - HELD THAT:- We have carefully considered the rival contention and find that M/s Monila Goel and Mrs Mamta Goel both are technically qualified as B Tech graduate and BA LLB. Further there is no finding given by the learned assessing officer that expenditure is excessive or is unreasonable having regard to the business need of the assessee as well as the fair market value of the services and the benefit derived or accruing there from to the assessee. In absence of clear-cut findings with respect to the expenditure on these counts, the disallowance u/s 40 A (2) (b) cannot be made. - Decided in favour of assessee.
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