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2016 (5) TMI 1536 - ITAT CHENNAIValidity of assessment u/s 153A - Jurisdiction u/s.153A - HELD THAT:- In the present case, the assessment was framed consequent to search in the case of the assessee and duly recording panchanama on the basis of incriminating material. Hence, we do not find any infirmity in framing the assessment u/s.153A of the Act and the same is confirmed. This ground of appeal of the assessee is dismissed. Disallowance of sales promotion expenses - agreed addition - AO disallowed it on the basis of consent given by the assessee to make that addition, as the assessee has failed to produce the evidence in support of the claim of expenditure - HELD THAT:- Revenue authorities have not doubted the incurring of expenditure for sales promotion. However, they doubted the quantum of expenditure incurred. The business cannot be carried on without incurring sales promotion expenditure. The ld. AR pleaded, before us, that most of these payments were passed through banking channels. In such circumstances, the disallowance of entire sales promotion expenditure is not proper. If the sale promotion expenditure are not supported by proper bills or vouchers or receipts and payments have been made only by cash, then there are chances of inflating of such cash expenditure. Even if it is so, the entire expenditure cannot be disallowed. Since, there is possibility of inflating of cash expenditure, disallowance of certain percentage of the expenditure to be made. From this point of view, if the expenditure is not fully vouched, the Assessing Officer is directed to disallow only 10% of the unsupported cash expenditure out of this and he shall not disallow 100% of such expenditure. Accordingly, we remit this issue to the file of the AO for fresh consideration - Assessee's ground is allowed for statistical purposes. Levy of interest u/s.234A and 234B - HELD THAT:- The interest under section 234A is chargeable from the date of expiry of the notice period given under section 153A to the date of completing the assessment under section 143(3) r.w.s. 153A of the Act, as held by the Tribunal in the case of ACIT v. VN. Devadoss [2013 (9) TMI 400 - ITAT CHENNAI]. The interest under section 234B is to be levied only on the additional tax levied on the enhanced income determined under section 143(3) r.w.s. 153A of the Act. Therefore, the period of charging of interest should be from the date of determination of income under section 143(1) or 143(3) to the determination of enhanced income under section 143(3) r.w.s. 153A of the Act.
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