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2016 (8) TMI 760 - AT - Income TaxDisallowance on account of Sales Promotion expenses - Held that:- Since the transactions are recorded in the books of accounts of the assessee, unless there is a fact to contradict such transactions, disallowances cannot be made on the basis of certain assumptions. It is a normal practice in business that expenses are incurred as incentive to the dealers against bulk orders to push sales. Such endeavor of the assessee can be seen as successful in increase of the turnover. The action of the AO to make the addition just for the sake of the addition ignoring all the material facts brought into the assessment proceedings by the assessee is not justified and hence addition made was deleted and this ground of appeal was allowed. In view of the aforesaid discussions and precedent relied, we are of the considered view that transactions were recorded in the books of accounts of the assessee and unless there is a fact to contradict such transactions, the disallowance cannot be made on the basis of assumptions. Moreover, it is noted that it is a normal practice in the business that expenses are incurred as incentive to the dealers against bulk orders to push sales which can be seen from the increase turnover of the assessee. Therefore, the Ld. First Appellate Authority has rightly deleted the addition in dispute and there is no need to interfere in the well reasoned finding given by the ld. First Appellate Authority, hence, we uphold the order of the Ld. CIT(A) on the issue in dispute and decide the same in favour of the Assessee and against the Revenue. Addition u/s. 40A(2)(b) - Held that:- Nature of transaction is genuine and in the absence of any revenue loss, and rightly deleted the disallowance by passing a well reasoned order which does not need any interference on our part, hence, we uphold the same. Accordingly, this ground raised by the Revenue is decided in favour of the Assessee and against the Revenue.
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