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2018 (10) TMI 929 - AT - Income TaxAddition on account of excess stock found during the course of survey action - unrecorded and unexplained stock / expenditure - Held that:- The cost of items which has been recorded in the bill of entry, has been paid by the assessee. In terms of section 69C of the Act, if the assessee offers no explanation about the source of the expenditure, or the explanation offered by him is not in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure, may be deemed to be the income of the assessee for such financial year. The assessee has failed to discharge his onus to explain the source of expenditure or how the same has been paid. There might be number of ways through which such expenditure could be adjusted between two parties which remain in the knowledge of the those parties. This may be by way of passing certain benefit to the Associated Enterprises also. Since, in the instant case, the assessee has not explained as how the said cost/price has been paid to the Associated Enterprises, thus, the lower authorities are justified in treating the said expenditure as unexplained expenditure and deemed income of the assessee. The ground of the appeal of the assessee is accordingly dismissed. Addition of foreign travel expenses - Held that:- We find that except standard explanation that participation of doctors in the International conferences helped in understanding the products, no documentary evidence which could specifically establish that expenses on hotel and registration of doctors was related to the business of the assessee are filed. The counsel of the assessee was asked by the bench to submit the detail of the conference in which the doctors participated and asked to explain, whether the products sold by the assessee were subject matter of those conferences, but no such evidences have been produced before us by the counsel of the assessee. The filing of copy of bills of expenditure on hotel or registration in itself cannot establish whether the expenditure has been incurred wholly and exclusively for the purpose of business. In view of the aforesaid discussion, we are of the opinion that action of the lower authorities in disallowing the expenses in dispute is justified in terms of section 37(1) of the Act. The ground of the appeal is accordingly dismissed. Disallowance of 4/5th of advertising and expenses - Held that:- It is undisputed that assessee has not claimed for such a spreading over of the expenditure. The only ground of disallowance in the year under consideration is in view of the decision of the Hon’ble Supreme Court cited by the Assessing Officer. The Tribunal in the preceding year has already deleted the disallowance made on similar ground, thus respectfully following the same, we set aside the finding of the Ld. CIT(A) on the issue in dispute and the disallowance made in the year under consideration is directed to be deleted.
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