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2017 (9) TMI 35 - AT - Income TaxAllowable business expenditure u/s 37 - sales promotion expenses - expenditure incurred for business purposes - Held that:- In absence of required documentary evidence, in our opinion the disallowance of 50% of the expenses for the sales promotion under section 37(1) of the Act was justified. Providing free air travel, stay and food in hotels, local car conveyance etc. for prescribing medicines of the assessee is akin to giving commission and certainly in contravention of the public policy. Thus, respectfully following the decision of the Hon’ble Punjab and Haryana High Court in the case of CIT Vs. Kap Scan and diagnostics Centre (p) Ltd (2012 (6) TMI 620 - Punjab and Haryana High Court ), the 50% expenses out of the sales promotion expenses disallowed by the Assessing Officer was justified. Here we find that the expenses toward sponsoring to doctors appears to be exceeding 50% of the sales promotion expenses and therefore the Assessing Officer is more than liberal in disallowing 50% of the sales promotion expenses of the assessee. - Decided partly in favour of assessee. Disallaowance of expenses for delay in contribution made towards Provident Fund payments - Held that:- The payment by an employer of employees’ contributions to Provident Fund are not governed by the provisions of section 43B as stated by the appellant. Rather, the employees’ contributions to PF are included in the income of an assessee as per the provisions of section 2(24)(x) of the Act and only if an employer deposits these contributions received by him, by the specified date given in the Provident Fund Act (which is the 20th of the month following the month to which the contributions pertain) are these payments allowed as a deduction from the income in view of the provisions of section 36(1 )(va) of the Act.Since the payment of ₹ 5,94,741/-is paid after the prescribed time The disallowance of ₹ 5,94,741/- made by the Assessing Officer is, accordingly, upheld. This ground of appeal is dismissed.” Disallowance of depreciation claimed on the UPS, Rack, switch and battery etc. - 15% or 60% - Held that:- Depreciation at the rate of 60% on UPS allowed. See Steel Authority of India Vs. Addl. CIT [2013 (2) TMI 67 - ITAT DELHI]
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