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2018 (6) TMI 834 - AT - Income TaxDisallowance for conversion charges paid to the Municipal Corporation - whether capital expense or revenue expense - Held that:- Conversion charges as well as parking charges paid by the assessee are necessary charges without which the assessee cannot run the business - relying on the judgement in case of DCIT vs. Haldiram Products Pvt. Ltd. [2013 (12) TMI 1151 - ITAT DELHI] where it is held that when necessary expenditure has been incurred by making payment to the MCD, it cannot be of any enduring benefit to the assessee - charges have been paid by the assessee for regularization of his existing business thus revenue in nature - Decided against the revenue. Disallowance on account of repair and maintenance - Held that:- Addition cannot be made on the basis of assumption that purchase of marbled has not been utilized particularly when books of accounts of the assessee have been accepted by the AO - even the evidence adduced by the assessee to prove the repair and maintenance, has, also not been disputed but the addition has merely been made on the basis of surmises - hence CIT(A) rightly deleted the addition - Decided against the assessee. Disallowance on account of business promotion expenses - Held that:- When we examine Business Promotion Expenses of ₹ 23,46,918/- claimed by the assessee in the light of the facts that the assessee has given turnover of more than ₹ 190 crores with returned income of ₹ 4,97,47,060/- and further in the light of the fact that in AYs 2008-09 & 2009-10, the Revenue has allowed expenses on account of Promotion Business Expenses to the tune of ₹ 32.33 lacs and 29.11 lacs respectively, the disallowance has rightly been deleted - Decided against the Revenue.. Disallowance u/s 40A(2)(b) for Fabrication Charges paid to the sister concern - Held that:- The disallowance cannot be made merely on the basis of estimation particularly when there is no fall in the G.P. Rate or Net Profit Rate which is more than the preceding year - AO has not collected any evidence to prove evidence from the prevailing market that expenditure incurred/claimed by the assessee were excessive or unreasonable with regard to the fair market value of the services - thus CIT(A) has eighty deleted the disallowance - Decided against the revenue. Disallowance of Production Incentives - Held that:- We are of the considered view that when the assessee has not brought on record the complete details of production incentives and the criteria for granting the incentive has not been provided to the AO. The same cannot be allowed - thus to enhance the sale production incentives need to be given by the assessee to its employees but the same cannot be allowed at the mere asking of the assessee - hence we set aside this issue to the AO to decide afresh on filing details/evidence by the assessee to prove the fact that the production incentive has been paid to employees under the policy formulated by the assessee - Decided in favour of revenue
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