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2016 (4) TMI 459 - AT - Income TaxDisallowance of sales promotion expenses - Held that:- The Assessing Officer himself has allowed part of the expenditure and had directed to allow the balance in the succeeding years. In the absence of concept of Deferred Revenue Expenditure being recognized by the Income Tax Act, we find no merit in the order of Assessing Officer in this regard. Accordingly, we uphold the order of CIT(A) in allowing the claim of assessee in entirety. The perusal of order passed by the CIT(A) relating to assessment year 2001- 02 reflects that the CIT(A) had observed that the Income Tax Act recognized any expenditure either as capital or revenue expenditure and the concept of Deferred Revenue Expenditure was not supported by provisions of the Income Tax Act, he nce the total expenditure was allowed in the hands of assessee in assessment year 2001- 02. The CIT(A) while deciding the present appeal relating to assessment year 2002-03 has followed the said decision. We find no error in the aforesaid observations of CIT(A) and upholding the order of CIT(A), we dismiss the ground of appeal relating to sales promotion expenses raised by Revenue in the appeals relating to assessment years 2002-03, 2003-04 and 2004-05 before us.- Decided in favour of assessee Disallowance for power and fuel expenses - Held that:- On one hand, the residential colony comprises first the residential accommodation provided to the employees and it is the case of assessee before us that in case any expenditure is incurred vis-à-vis residential quarters of the employees, the same is recovered from them. Even in case the same is not recovered from them, does not merit the disallowance made in the hands of assessee. Further, part of power and fuel expenses were incurred on providing lights to the residential colony and also to the common facilities provided by the assessee to its employees, which was the obligation of the assessee company and hence, expenditure incurred towards discharge of said obligation is business expenditure of the assessee company and is duly allowable in the hands of assessee. Further, the expenditure relatable to residential quarters is no doubt to be recovered from the employees or is to be included as perk in the hands of employees of the assessee company, but merely because no such exercise was carried on, does not merit the disallowance of expenditure in the hands of assessee. - Decided in favour of assessee
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