TMI Blog2014 (6) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses is restricted to Rs.3,00,000 – Decided partly in favour of Revenue. Deletion of cessation of liability u/s 41(1) of the Act – Disallowance of unproved creditors for expenses - Held that:- The opening and closing balance of the party were same and there is no evidence brought on record that the assessee has derived any benefit in cash or in any other manner whatsoever – Following DSA Engineers (Bombay) Vs. ITO [2009 (3) TMI 646 - ITAT MUMBAI] - when the assessee continues to reflect or record the liabilities as still payable to the creditors and decides not to write them off unilaterally, the AO has higher levels of responsibility – he has to establish with evidence that the book entries were wrong or not bona fide – thus, the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on behalf of the assessee before the Tribunal. Accordingly, the notice of hearing has been served through Income Tax Department, and the evidence thereof has been filed by the Department with the Tribunal. In these facts, we proceed to decide the present appeals ex parte qua the assessee on merits after hearing the learned DR. ITA No.976/Ahd/2011 (Revenue s appeal): 3. The ground no.1 of the Revenue is as under: 1. The ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.6,12,700/- made by the AO in respect of commission expense. 4. The learned DR submitted that the assessee could not establish the genuineness of the entire commission expenses of Rs.21.43 lakhs. He submitted that the sales have been declin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), and accordingly, the ground no.1 of the Revenue is partly allowed. 6. The grounds no.2 and 3 of the Revenue is as under: 2. The ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.2,49,336/- made by the AO on account of cessation of liability u/s.41(1) of the Act, in respect of unproved creditors. 3. The ld.CIT(A) has erred in law and on facts in deleting the disallowance of Rs.98,725 in respect of unproved creditors for expenses. 7. The learned DR has referred to relevant portions of the assessment order in support of the case of the Revenue. He relied on the order of the AO. 8. We have considered submissions of the learned DR and perused the orders of the AO and the CIT(A). We find that the opening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance of Rs.1,17,705/- on account of meeting expenses. 13. The learned DR has relied on the order of the AO. We have considered the submission of the learned DR and perused the orders of the AO and the CIT(A). We find that the expenditure was incurred for organizing meetings on regular intervals of all the marketing personnel situated at different locations to co-ordinate its business of the assessee. Sometime, the persons coming from various cities, towns, districts etc. could not furnish vouchers on time, and therefore, the assessee-company has incurred the said expenditure on cash basis in the year in which the vouchers were received and payments were made, and therefore, the CIT(A) has rightly held that such expenses having crystall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accountant of the assessee. We find that this way of the accounting is unusual and does not inspire confidence with regard to the genuineness of the entire conveyance expenses claimed by the assessee. The onus was on the assessee to prove the genuineness of the expenses claimed by it. In these facts of the case, we are of the view that the ends of justice shall be met, if the disallowance out of conveyance expenses is restricted to Rs.1,00,000/- as against the disallowance of Rs.45,000/- sustained by the CIT(A), and accordingly, the ground no.6 of the Revenue is partly allowed. 16. In the result, the appeal of the Revenue is partly allowed. CO No.170/Ahd/2011 (Assessee s CO) 17. There is a delay of 41 days in filing the CO with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. The ground no.3 of the CO of the assessee is as under: 3. That on facts and in law, the ld.CIT(A) has grievously erred in confirming the addition of Rs.24,000/- made out of salary expenses. 21. We have heard the learned DR. We find that the CIT(A) has passed a reasonable order on this issue, and there is no merit in the ground of the CO of the assessee. We find that the CIT(A) has recorded that no evidence was placed before him by the assessee in support of its argument and accordingly, the disallowance was confirmed. There being no mistake in the order of the CIT(A) on this issue, the ground no.3 of the CO of the assessee is dismissed. 22. The ground no.4 of the CO is as under: 4. That on facts and in law, the ld.CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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