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2021 (6) TMI 455 - AT - Income TaxDisallowance of weighted deduction u/s.35(2AB) - HELD THAT:- In this case, as per information available on record, the assessee has submitted approval letter from the Competent Authority i.e., Ministry of Science and Technology, Govt. of India, only for an amount of ₹ 59,23,000/-, whereas deduction has been claimed for an amount - Therefore, there is no error in the findings of the AO to disallow weighted deduction claimed u/s.35(2AB) of the Act, for excess deduction. But, alternative claim of the assessee that even if, expenditure is not eligible for weighted deduction u/s.35(2AB) of the Act, but same has been incurred wholly and exclusively for the purpose of business of the assessee, further, there is no bar under the Act to claim deduction towards genuine expenditure incurred for the purpose of business u/s.37(1) of the Act. But, fact remains that there is no information as to what kind of expenditure the assessee has incurred for the purpose of business, whether it is capital expenditure or personal expenditure or revenue expenditure. Therefore, to ascertain facts with regard to nature of expenditure, issue has been set aside to file of the AO and direct him to cause necessary enquiries and take appropriate decision in accordance with law. Addition towards difference in export turnover - AO has made addition towards export turnover on the basis of information available with Income Tax Department and sales declared by the assessee in the P & L account, on the ground that the assessee has failed to file necessary reconciliation explaining difference in turnover - HELD THAT:- We find that the AO has made addition towards difference in export turnover on the basis of information available with the Department, but such information was not furnished to the assessee. It is a well settled principle of law that before taking any adverse view, it is bounded duty of the AO to show-cause to the assessee as to why he is proposing such addition and also furnish information relied upon by the AO to arrive at such conclusion. In this case, it is the claim of the assessee that information relied upon by the AO to make addition towards export turnover was not furnished to the assessee. Therefore, we are of considered view that the issue needs to go back to file of the AO to give one more opportunity to the assessee to explain its case. Needless to say, the AO shall furnish information available with the Department to the assessee, so as to explain difference in export turnover as per books of accounts of the assessee. Adhoc disallowance of 10% of printing & stationery and sales promotion expenses - HELD THAT:- We find that except stating that disallowance quantified by the AO is excessive and unreasonable, the assessee could not furnish any evidences to support claim of expenditure including bills and vouchers. At the same time, the AO has also failed to give any reason for making adhoc disallowance of 10% of expenses. Considering facts and circumstances of the case and also plea of the assessee that disallowance computed by the AO is excessive and unreasonable, we deem thought it fit to direct the AO to restrict adhoc disallowance to 5% of printing & stationery and sales promotion expenses. Disallowance of claim of deferred revenue expenditure written off - HELD THAT:- As assessee has not filed any evidence to prove that it had incurred expenditure for the purpose of registration of products and business in relation to such product has been discontinued for the impugned assessment year. But, fact remains that, before us assessee has filed certain details including ledger extract of certain parties to prove that it had discontinued business with certain parties and on certain products. No doubt, any expenditure incurred for the purpose of business of the assessee can be allowed as deduction whether such business is continued or discontinued. But, fact remains that it is necessary for the assessee to prove that it had incurred expenditure for business of the assessee. In this case, no doubt the assessee has not filed any evidences before lower authorities to prove its case. Therefore, considering the fact that the assessee has not filed any details before the AO and also taking into account it had filed certain additional evidences before us to prove its case, the issue has been set aside to the file of the AO and direct him to reconsider the issue in light of material filed to prove its case. In case, the AO finds that the assessee has placed necessary evidence in support of its claim, then the AO is directed to allow the claim of expenditure.
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