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TMI Blog2012 (11) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in law as well as on facts in disallowing Prior Period expenses for commission of Rs.5,30,233/- paid to Ravindra Raja vide his bill No.1/05 dated 10-5-2007. 3. Ld. CIT (A) has erred in law as well as on facts in disallowing Prior Period expenses for commission of Rs.1,26,000/- out of commission of Rs.1,59,750/- paid to S. Hussain vide his bill No.PA- 01/0708 dated 1-8-2007. 4. Ld. CIT (A) has erred in law as well as on facts in disallowing Electricity charges of Rs.25,846/- out of Rs.1,31,426/- electricity charges for the month of March,2007 on the ground that they are related to the month of March,2007 but accounted in the month of April, 2007. 5. Ld. CIT (A) has erred in law as well as on facts in disallowing Generator Hire c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made various disallowances and the income was finally determined at Rs.5,46,62,140/-. Aggrieved by the decision of the A.O. the assessee preferred appeal before the CIT (A). 4. The CIT (A) dismissed the assessee's appeal vide his order dated 10-10-2011. Aggrieved by the decision of CIT (A), the assessee is now in appeal before us. 5. Ground No.8 of the appeal was not pressed at the time of hearing and hence not adjudicated. 6. Ground No.1 is regarding the Sales Promotion Expenses of Rs.7,61,700/-. 7. During the course of assessment proceedings, it was observed by the A.O. that the assessee had claimed following expenses under Sales Promotion Expenses:- Date. Particulars. Amount. 26-10-2007 PantalonRetails Pvt. Ltd., 2,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist of recipient, it was submitted that the same was not readily available but could be produced. 11. The D.R. relied on the order of the A.O. 12. We have heard the rival contentions, perused the records. The undisputed facts are that the assessee is engaged in the business of advertising agency. The assessee has incurred the expenses is not in dispute. The fact that the expenditure is 0.25% of the turnover is also not disputed. It is a fact that it is customary to incur expenses of gifts during festivals. In view of those facts, we are of the view that since the expenses have been incurred for the purpose of business the expenses should be allowed as deduction. However, as the assessee could not produce the list of recipients, we feel th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in current assessment year. He therefore, urged that the disallowance of commission be deleted. 16. The Ld. D.R. on the other hand relied on the order of the A.O. 17. We have heard rival contentions, perused the material on record. It is an undisputed fact that the debit note issued by Mr. Ravindra Raja is dated 10-5-2007, the payment has been made in the current year and TDS thereof has also been deducted before making the payment. In view of these facts we are of the considered opinion that the expenses pertains to the current year and are therefore, allowable. We accordingly direct the A.O. to delete addition of Rs. 5,30,233/-. Accordingly this ground of the assessee is allowed. 18. Ground No.3 relates to disallowing prior period ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A.O. had disallowed all these expenses for the similar reason that they pertained to the period March, 2007 and therefore, should have been treated as expenditure in F.Y. 2006-07. The CIT (A) had upheld the order of A.O. 24. Before us it was submitted that the assessee was following the consistent accounting policy of booking the expenses for the period March to February each year. This method of accounting was regularly followed by the assessee and was accepted by the Department. In view of these facts, the assessee contended that the addition made on account of electricity charges of Rs.25,846/-, generator hire charges of Rs.1,60,815/-, maintenance charges for bus shelters of Rs.80,000/- and salary to staff of Hyderabad of Rs.52,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted fact that the payment is for Municipal tax. Municipal tax is covered u/s.43B of the Act and is to be allowed on payment basis. Since the amount has been paid during the current F.Y. we are of the view that the same be allowed. We accordingly delete the addition made by A.O. This ground of the assessee is accordingly allowed. 31. Ground No.9 relates to the cash payment of Rs.23,840/- made to Shamim Choudhary for maintenance. The assessee submitted that it had made payment for maintenance charges the details of which are as under:- Date. Name of the party Particulars. Amount (Rs.) 18-8-2007 Roy Associates. Cash memo dt. 18-8-07for Weilding Rods. 2,220 18-8-2007 Roy Associates. Cash memo dt. 18-8-07 for Gurder. 880 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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