Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 523 - AT - Income TaxDisallowance of payment made to Related Parties u/s. 40(A)(2)(b) - assessee reimbursed amount to M/s. Ventura Securities Ltd. on sales lead received in the ratio of 90:10 out of total expenditure incurred by the related party - assessee failed to furnish the details of customers generated out of sales leads AND could not show how the sales were improved with the sale leads - HELD THAT:- The expenses so incurred are reimbursed by the assessee to that entity in certain ratio towards its share of expenses. The assessee would gain out of such marketing & advertising which could not be identified with specific clients. The arrangement so made would make it difficult for assessee to furnish the specific customer-list as desired by Ld. AO. We find that similar arrangement is continuing since AY 2011-12 and the assessee is making similar payment since then. The assessment for AY 2011-12 as well as for AY 2016-17 was framed u/s. 143(3) wherein similar claim made by the assessee was accepted. Further, payer as well as payee, both are in highest tax bracket and therefore, the invocation of provisions of Sec. 40A(2)(b) would not be justified. Hence, on the facts and circumstances of the case, we are inclined to delete this addition - Decided in favour of assessee. Disallowance of Gift Article Expenses - assessee was asked to justify its deduction in terms of Sec. 37(1) and in the absence of satisfactory explanation forthcoming from the assessee, the amount was disallowed - HELD THAT:- As the purchase of coins is duly supported by the invoice. It has been submitted that as per normal business practice, coins were distributed to sub-brokers to incentivize them to generate good business for the assessee. The details of the brokers to whom the coins have been distributed as performance reward was already placed before Ld. CIT(A). We find that the claim has been disallowed more on mere presumption that expenses were not incurred for business purposes. As against this, the assessee had placed requisite documentary evidences on record, in support of the claim. Therefore, the addition so made would not be sustainable. By deleting the same, we allow this ground of appeal.
|