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2022 (12) TMI 927 - AT - Income TaxDisallowance of marketing expenses incurred during the year - Disallowance of marketing expenditure u/s 37(1) by treating the same as non-genuine/non-business transaction/expenditure - HELD THAT:- In order to determine the genuineness of the payment made by the assessee AO issued notices under section 133(6) - only 2 parties namely, M/s EIH Ltd and The Lalit Golf and Spa Resort failed to respond to the aforesaid notice. In order to substantiate the genuineness of the payment to these 2 entities, assessee furnished the bank account statement, which reflected the payment made to these parties, invoices raised by these entities to the assessee, details of tax deducted on payment made to these parties, PAN No. and complete address. It is no doubt true that payment through the bank channel is not conclusive proof of the transaction. At the same time, when the assessee has provided all the information available with it regarding the transaction, merely on the basis that the entity has not responded to notice issued u/s 133 (6) the transaction cannot be doubted and be treated as non-genuine, particularly when the same has been entered into with entities which are well-known Hotel chains in India. It is also not the claim of the Revenue that these entities are not in existence or the documents furnished by the assessee are bogus. Thus we find no basis in upholding the addition by the AO merely on the basis that only 2 out of 17 parties failed to respond to the notice issued u/s 133(6) of the Act. We direct the AO to delete the addition. Grounds raised in assessee’s appeal are allowed.
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