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2016 (4) TMI 869 - AT - Income TaxDisallowance of of "advertisement and circulation expenses" - Held that:- Assessing Officer has observed that in the course of checking of the claim, it transpires that significant portion of the claim incurred was incurred in cash and further instances were noticed where the expenses were apparently found to be not allowable. He has further noted that it was explained by the assessee that the expenditure claimed as mentioned here in before were incurred wholly for the business purpose but as per the Assessing Officer, the submission of the assessee were not found convincing as very nature of the expenses mentioned above establishes beyond doubt the same were personal in nature. After making these observations, the Assessing Officer has made adhoc disallowance of ₹ 10.00 lakh but it is surprising that even after stating this that the nature of expenses is personal in nature as per various instances noticed of the Assessing Officer, the Assessing Officer has not mentioned even a single instance of the expenses which are personal in nature. Ld. CIT(A) has deleted the disallowance made by the Assessing Officer to the extent of ₹ 8.00 lakh out of ₹ 10.00 lakh but he confirmed the disallowance of ₹ 2.00 lakh on this basis that Assessing Officer has mentioned that some of the expenses claimed were found to be not allowable or were personal in nature. Ld. CIT(A) has also not pointed out even a single instance of expenses which is not allowable or which is personal in nature. Under these facts, in our considered opinion, adhoc disallowance confirmed by the Ld. CIT(A) is not justified - Decided in favour of assessee Disallowance on account of electricity expenses of Directors’ residence - Held that:- Regarding the expenses incurred in respect of electricity expenses for the residence of the Directors, the judgment of the Hon’ble Gujarat High Court rendered in the case of Sayaji Iron and Engg. Co. Vs. CIT [2001 (7) TMI 70 - GUJARAT High Court ] supports the case of the assessee because it was held in this case that for the alleged personal use by Directors, expenditure cannot be disallowed in the hands of the assessee company although the claim may be added in the hands of the concerned Directors/ employees as perquisite. Respectfully following this judgment of the Hon’ble Gujarat High Court, we delete the disallowance Disallowance in respect of insurance premium paid for mediclaim policy of the Directors - Held that:- This much amount was incurred on account of payment to New India Assurance Co. Ltd. on behalf of the Directors in respect of insurance premium for personal accident policy and Mediclaim Policy. The Assessing Officer disallowed this claim by holding that these are personal expenses. This is not the case of the Revenue that such insurance premium was not payable by the assessee company as per the terms of appointment of the Directors. Hence, as per this judgment of the Hon’ble Gujarat High Court rendered in the case of Sayaji Iron and Engg. Co. Vs. CIT (Supra), this amount also cannot be disallowed in the hands of the assessee company although the same may be considered for taxation in the case of concerned Directors as per law and therefore, this disallowance is also deleted. Disallowance of expenses incurred on education and training of Shri Rahul Gupta for his education of MBA course in UK - Held that:- After returning to India after completion of study abroad, Mr. Rahul Gupta is providing consultancy to the assessee company free of charge and therefore, respectfully following this judgment of the Hon’ble Allahbad High Court in the case of CIT Vs. U.P. Asbestos Ltd. [2012 (9) TMI 1021 - ALLAHABAD HIGH COURT ], we delete the addition made by the Assessing Officer
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