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2022 (12) TMI 875 - AT - Income TaxDisallowance of rent paid to M/s. DRS Industries Ltd - question of assessee making payment to land owner towards rent - HELD THAT:- The undisputed facts are that the agreement between the assessee and M/s. DRS Industries Ltd did not materialize and consequently, the dealership of Skoda cars sales & services has not been transferred to the assessee. Rent agreement in respect of premises where the business was carried out by M/s. DRS Industries Ltd., was also in the name of M/s. DRS Industries Ltd., and the land lord. Therefore, the question of assessee making rent payment directly to land owner does not arise. It is not case of the assessee that it has paid rent to M/s. DRS Industries Ltd., in pursuance of an agreement and in turn M/s. DRS Industries Ltd., has paid rent to land lord. In absence of any agreement between the appellant and land lord, the AO has rightly disallowed rent expenses debited into the profit and loss account. CIT(A), after considering relevant facts has rightly sustained additions made by the AO and thus, we are inclined to uphold the findings of the ld. CIT(A) and reject grounds taken by the assessee. Disallowance of advertisement expenses paid - AO has disallowed advertisement expenses incurred by the assessee, on the ground that there is no valid agreement between the assessee and M/s. DRS Industries Ltd., for incurring advertisement expenses - HELD THAT:- We find that there is no valid agreement between the appellant and M/s. DRS Industries Ltd., and further the so called agreement is not acted upon, and as claimed by the assessee for various reasons, the dealership of Skoda cars sales & services has not been transferred in the name of the assessee. Therefore, the assessee is running a dealership business and incurring of advertisement expenses does not arise. CIT(A) after considering relevant facts has rightly sustained net advertisement expenditure debited into the profit and loss account and thus, we are inclined to uphold the findings of the Ld. CIT(A) and reject the grounds taken by the assessee.
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