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2021 (3) TMI 880 - AT - Income TaxDisallowance of advertisement expenditure - HELD THAT:- It is not in dispute that the assessee has prima-facie discharged its onus of filing on record all the documentary evidence regarding the impugned advertisement expenditure in the regular course of business. The fact also remains that the two of its payees have been found to be included in the list of shell entities thereby providing mere accommodation entries. Hon'ble apex courts landmark decisions Sumati Dayal Vs. CIT [1995 (3) TMI 3 - SUPREME COURT] and CIT Vs. Durga Prasad More[1971 (8) TMI 17 - SUPREME COURT]hold that the relevant explanation in income tax proceedings has to be examined in the light of human probabilities by removing all blinkers. We adopt the very methodology herein as well and find that the assessee’s recipients status as ‘shell companies’ has indeed cost doubts on its advertisements claim. The fact also remains that the role of day-to-day advertisements in assessee’s line of publication business cannot be altogether ruled out. This taxpayer has further filed supportive relevant details of the advertisement spots as well as photographs thereof in the paper book. It can be sufficiently presumed that this assessee has carried out some advertisements in regular course of business but it could not be proved since the recipients have been treated as accommodation entry providers. Faced with this situation, we deem it appropriate in larger interest of justice that the impugned disallowance deserves to be confirmed @40% only. More so to avoid abnormally high rate of profits in publication business. The remaining 60% of the impugned disallowance thereof stands deleted. - Decided partly in favour of assessee.
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