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2016 (4) TMI 203 - AT - Income TaxDisallowance of Book Distribution expenses - Held that:- AO disallowed the expense in relation to sample books distribution on the basis of non-availability of supporting documents at the time of assessment proceedings. The assessee was able to produce only the receiving registers duly signed by the recipients to whom the specimen copies were given. In the absence of documentary evidence the AO disallowed such expense on the basis of reasonable estimate. We further find that such expense claimed by assessee for distributing of sample books are not supported from the bills & vouchers. However, Ld. AR was able to give the registers, wherein the details of recipients of sample books were contained. We also find that disallowance was made by AO @ 35% of total book distribution expense which has been reduced by Ld. CIT(A) to 15%. From the order of lower authorities we find that that the nature of the expenses has not been doubted but the supporting expenses vouchers have not been produced, so the disallowance was made on estimated basis. No comparison of such expenses claimed by the assessee in the preceding years or subsequent years relevant to the year under consideration has been furnished. Considering the fact regarding the importance of distribution of sample books and totality of the claim of assessee we further restrict the distribution of such expenses to the extent of 5%. Accordingly, we direct the AO to re-compute the disallowance of sample books distribution expenditure @ 5% of the total expense incurred by assessee. - Decided partly in favour of assessee Disallowance of carriage inward expense and carriage outward expenses - Held that:- It is only possible to make such payments in cash and not through any banking channel. Also on the reverse side of vouchers the names of coolies/transports to whom payment were made put their signatures/thumb impressions. Evidencing the genuineness of the expense, sample copies of debit vouchers relating to 'carriage inward' and 'carriage outward' enclosed at page No. 46 to 89 of the paper book is enclosed. As find from the chart given by Ld. AR in relation to above stated expenses that assessee has been incurring such expenses for the above stated activities and no disallowance has been made in the past. Besides, this, we find the amount incurred by assessee is meager. Considering the submission of Ld. AR and totality of the facts, we reverse the orders of authorities below and delete the additions made by AO.- Decided in favour of assessee Disallowance of "Shree Ganesh Puja and "Bengali New Year Celebration" expenses - Held that:- AO disallowed such expenses on ad hoc basis @ 25% of the above-stated expenses. However, we find from the details of expenses given by assessee in the form of a comparative chart that such expenses have been incurred by assessee in earlier year and no disallowance have been made on this account. Therefore, in order to maintain the consistency of such expenses we deem it fit to reverse the orders of authorities below and delete the same.- Decided in favour of assessee Disallowance of sales promotion expenses - Held that:- Assessee has been claiming these expenses in the earlier years and subsequent year to the relevant year. But no disallowance has been made in respect of the above expenses in earlier years and subsequent years to the relevant assessment year.We find that the AO has disallowed the expenses on adhoc basis due to non production of the supporting bills and vouchers. However the ld. AR before us has submitted a chart showing the comparison between the turnover and such expenses for the earlier years and subsequent year. The purpose of this comparison of expenses of various years isto justify that the assessee has been incurring such expenses consistently and no issue for the disallowance arose.In view of above and in the interest of justice we reverse the orders of authorities below and delete the addition. - Decided in favour of assessee Disallowance of canvassing charges - Held that:- The assessee has been incurring such expenses for canvassing charges for which no disallowance has been made by Revenue either in earlier year or subsequent year. Therefore to keep the consistency incurring by assessee for such expenses and considering the facts of the case, we delete the additions made by AO and confirmed by Ld. CIT(A) and AO is directed accordingly.- Decided in favour of assessee
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