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TMI Blog2014 (2) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... the case is that the assessee is engaged in the business of travel agency. To do the said business he had two proprietary concerns namely M/s. Cosmos Travels & Tours and M/s. Sino Cosmos Travel Services; and the assessee had filed his return of income on 27.09.2008; declaring a total income of Rs. 49,83,262/-. The assessee has declared income from business/profession, house property and income from other sources which mainly included bank charges and other interest. The Assessing Officer observed in the assessment order that the assessee has debited an inflated expenses of Rs. 10,66,386/- in the P&L Account of the M/s. Cosmos Travel & Tours which according to the Assessing Officer is a defunct concern. So, Assessing Officer in his wisdom, has disallowed 25% of the total expenses which amounts to Rs. 2,56,622/-. The Assessing Officer also disallowed expenses claimed under the head of Charity & Donation and loss on sale of investments amounting to Rs. 39,897, so a total addition on account of these disallowances came up to a total Rs. 2,96,519 (Rs. 2,56,622 + Rs. 24,000 + Rs. 15,697). 5. Aggrieved by the said disallowance the assessee preferred an appeal before the Ld CIT(A), who al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer in his order points out few instances wherein the expenditure claimed by the CTT was quite high when compared with that of SCTS and has brought out that an auditor fee of Rs. 37,280/- have been debited in CTT as compared to the auditor fee of Rs. 16,854/- in SCTS; likewise the Assessing Officer compared the business promotion expenses of both the concerns and point out that Rs. 1,62,286/- have been debited in CTT whereas only Rs. 46,975/- has been debited in SCTS. According to the Assessing Officer, income shown in P&L Account of CTT is only 3% of the income shown in P&L Account of SCTS. Therefore Assessing Officer concludes that in view of the dormant condition of the business of CTT the expenses are highly inflated and wrongly claimed by the assessee. 9. So, the Assessing Officer observes that CTT was incurring inflated expenses whereas the expenses incurred in the hands of SCTS were far less. Therefore, on an ad-hoc basis the Assessing Officer disallowed 25% which amounted to Rs. 2,56,622/-; as well as he disallowed the expenses claimed under the head charity and donation and on loss of sale of investment total amounting to Rs. 39,897/- was also disallowed. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso both the concerns M/s Cosmos Travels and Tours and M/s. Sino Cosmos Travel Services are both owned by the assessee and the income which is received from both the concerns are included in his income and similarly expenses of both the concerns are debited from his account. Therefore, the Assessing Officer erred in appreciating the said factual aspect and made the mistake by comparing the expenses incurred by both the concerns. The ld CIT(A) also noted that the Assessing Officer did not find any defect either in the bills or vouchers or books of accounts for which expenses like bank and interest charges were disallowed to the tune of Rs. 24,200/- and Rs.15,697/- was disallowed on account of loss on sale of investment. The ld CIT(A) observed that the Assessing Officer did not bring any material on record pertaining to the acquisition or sale of the same or its computation. Ld CIT(A) has rightly appreciated the facts in this matter and has rightly deleted the said addition made by the Assessing Officer and therefore we are inclined not to interfere in the said order of the ld CIT(A). Therefore, we find no infirmity in the order of ld CIT(A) on this ground and therefore the appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 16. We have heard both the rival submission and perused the record. We find that the ld CIT(A) has noted the fact that the said amount of Rs. 26,07,858/- was sale consideration in respect of air tickets of Tajikstan Airlines issued by the assessee during the financial year 2004-05. The Ld CIT(A) finds that the assessee was appointed as GSA of the Tajikstan Airlines w.e.f. 10.11.2003 , as a GSA the assessee used to sell air tickets of Tajikstan Airlines and collected the sale consideration from the customers. The amount so collected amounting to Rs. 26,07,585/- by the sale of Tajikstan Airlines belongs to that of M/s. Tajikstan Airlines (subject to agreement between them) and according to the outcome of litigation between them. It has to be noted that the airlines has filed a suit before the Hon'ble Delhi High Court to recover an amount of Rs. 26,07,585/- and the case is still pending. 17. In this factual scenario ld CIT(A) notes that the assessee has not discharged his liability which arose during the financial year 2004-05. It is also noted that when the said airlines suddenly terminated the agency of the assessee, the assessee claimed damages for loss of reputation and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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