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2018 (3) TMI 1077 - AT - Income TaxAddition on account of suppressed sale - Held that:- CIT(A) has rightly deleted the addition in the absence of any cogent or convincing evidence that the assessee has surpassed i ts sales. The assessee has explained about var ious factors contributing for the low yield. Even otherwise, in our view, in the absence of any incriminating evidence, it cannot be assumed that the assessee might have suppressed the sales - Decided against revenue Capitalization of interest - AO disallowed the capitalization of the above interest on the ground that the machinery was not put to use during the year - Held that:- As the assessee has submitted that the machinery was put to use as a trial run was done prior to first April, 2012 but the above contention of the assessee is not supported with any cogent and convincing evidence. - Decided against assessee Deprecation on building disallowed - building was not completed at the end of the financial year i.e. by 31st March, 2012 - Held that:- Admittedly, the bricks and cement was purchased in the month of March itself, which was used for the construct ion of the aforesaid building. In view of this, in our view, lower authorities have rightly held that the building was not competed at the close of the year i.e 31st march of the relevant year. There is no evidence brought to our knowledge that the building was put to use during the year. - Decided against assessee Disallowance of part of expenditure on foreign trip of the Director on the ground that the family of the director accompanied him - Held that:- As assessee could not explain as to how the family of the director contributed in procuring business for the assessee company. Hence, in our view, the lower authorities have rightly disallowed the expenses relating to the foreign trip of the family of director of the assessee - Decided against assessee Disallowance of 50% of sales promotion expenses claimed to have been incurred on purchase of costly gifts - allowable business expenditure - Held that:- The assessee could not explain about the justification in incurring of the expenses on the gifts and also could not correlate with evidence that the said expenditure were relating to the business activity of the assessee - Decided against assessee Disallowance of expenditure incurred on consumables - Held that:- The lower authorities have not doubted the incur ring of expenditure on the basis of any incriminating evidence found against the assessee. The disallowance has been made merely on conjecture and surmises. We agree with the content ion of the Ld. Counsel for the assessee that there cannot be an est imation of a f ix amount regarding the consumption of consumables in manufacturing products, which may vary owing to various circumstances as explained by the assessee. The above disallowance has been made by the lower authorities only on a presumption basis which, in our view, is not sustainable - Decided in favour of assessee.
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