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TMI Blog2010 (4) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... Out of a claim of Rs. 6,38,256, the Assessing Officer disallowed Rs. 1 lakh on the basis that complete supporting evidence relating to boarding and lodging expenses claimed at Rs. 2,62,675 were not filed. The learned Commissioner of Income-tax (Appeals) has upheld the same. The contention of the learned authorised representative before us remained that though the assessee-company was got registered in the year 1996-97 but it started its activities only during the assessment year under consideration. The company was formed for doing the business of precious and semi-precious stones and other allied businesses. The directors were well experienced in this line and had been going to foreign countries in the past and used to import rough emeral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not justified in arriving at a figure of Rs. 2,62,675 on this account other than the airfare. The learned authorised representative pointed out that the total stay was for 41 days on which the amount was incurred at Rs. 1,73,786 which is just about Rs. 4,250 per day and most reasonable looking to hotel, food, local travelling, etc. The Assessing Officer has made disallowance of Rs. 1 lakh out of such expenses without assigning any reason. The learned Departmental representative on the other hand tried to justify the orders of the lower authorities. Considering the above submissions, we are of the view that even if the expenses claimed on food, lodging and travel at Rs. 1,73,786 were not supported by the bills and vouchers as alleged b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer in disallowing the claim of Rs. 54,000. The learned authorised representative pointed out that because of the working of directors, the assessee-company could achieve a turnover to the extent of over Rs. 43 lakhs in the first year of operation. When salary has been allowed in the case of Shri Lokesh Kumar Lodha then there is no occasion for disallowance of the equal amount paid to Ms. Rakhee Lodha. He submitted that even at that time, peon/ clerk used to draw much more salary than Rs.4,500 per month when she was a working director involved in the whole activities of the company. If it is considered in percentage of total turnover, it is just about 1.5 percent The learned authorised representative further submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brokers. No sale takes place without a broker. There is no contact of the buyer as well as the seller. Entire activity is through the brokers who takes the goods from the seller, surveys the market, visits various places for showing the goods and once the goods are approved then hands over the goods to the purchaser and brings cheque of the sale amount. He drew our attention to details of brokerage placed at page 87 of the paper book with this further contention that entire brokerage has been paid by account payee cheque. None of the brokers are related to the directors. They work for the company and their brokerage was paid at the rate of 2 percent of the work done by them. He submitted that there was no justification for coming to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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