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2015 (8) TMI 358 - ITAT CHENNAIDisallowance of local area expenditure - CIT(A) allowing of 50 per cent - Held that:- disallowance has been restricted to 50 per cent. on the basis of personal visit to the site by the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) has not raised any doubt over the expenditure incurred by the assessee on local area development. In the facts of the case, we are not inclined to interfere with the findings of the first appellate authority on this issue - Decided against revenue. Disallowance of business promotion expenses - CIT(A) allowing of 50 per cent - Held that:- While allowing 50 per cent. expenditure, the Commissioner of Income-tax (Appeals) has not given any reason. The contention of the assessee is that business promotion expenditure is towards incentives/gifts given to the representatives of customer companies to maintain cordial business relations. However, the assessee has not placed on record the details of the persons to whom such incentives were given. We do not find any reason in allowing even 50 per cent. of such expenditure in the absence of any document or any other evidence.- Decided against assessee. Disallowance of research and development expenses - CIT(A) allowing disallowance - Held that:-The assessee was able to establish before the Commissioner of Income-tax (Appeals) that M/s. Adwaith Textiles Ltd. suffered production loss and also the quality of yarn because of frequent interruption in production. The Commissioner of Income-tax (Appeals) in his order has categorically observed that the amount paid by the assessee to M/s. Adwaith Textiles Ltd. for using the mill floor facility has been assessed to tax in the relevant assessment years. The Revenue has not been able to controvert the findings of the Commissioner of Income-tax (Appeals). We do find any reason to interfere with the well reasoned findings of the first appellate authority in deleting the disallowance of research and development expenses. - Decided against revenue.
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