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DCIT, Circle 5 (1) New Delhi 2 and others Versus Mohan Brothers P. Ltd. and others

2015 (7) TMI 334 - ITAT DELHI

Disallowance of foreign travel expenditure - FAA deleted the addition on the ground that the assessee has filed all the details of foreign travel expenses along with the purpose of visit before the A.O. - Held that:- The assessee had also paid Fringe Benefit Tax on expenditure including on foreign travel. He observed that the A.O. after examining the details of vouchers and books, could not point out any specific expenditure, which in his opinion, is personal in nature. He relied on certain case .....

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s were made through account payee cheques. Regarding the bill dated 31.3.2009 on Tulsi Impex Pvt.Ltd. amounting to ₹ 2,45,536/-, the First Appellate Authority observed that total payments during the year to M/s Tulsi Impex P.Ltd. was ₹ 30,45,050/- and this particular bill was produced before him. He relied on number of case laws and on the ground that the A.O. has not pointed out to any infirmity in the bills, vouchers and books of accounts, the disallowance of expenditure incurred f .....

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f sample expenses - CIT(A) deleted the addition - Held that:- These are no grounds to disallow the said expenditure. The expenditure incurred on marketing and advertisement and promotional activities may not result in immediate jump in sales. On a sale of ₹ 33 crores the expenditure incurred is only ₹ 10.74 lakhs. It is not the case of the A.O. that the assessee has not incurred this expenditure or that he failed to substantiate with evidence, its claim of having incurred this expend .....

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td. [2008 (11) TMI 3 - DELHI HIGH COURT ] and allowed this ground of the assessee. We find no infirmity in the same. In the result this ground is dismissed.- Decided against revenue.

Disallowance of expenditure related to goods destroyed - Held that:- In the bill of entry for ex-bond clearance for home consumption, the details have been mentioned, wherein expiry date of the product is also mentioned. Evidence has been filed on payment of excise duty and a stamp which reads as “DEFACED .....

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, ACCOUNTANT MEMBER These are Cross Appeals directed against the order of the Ld.CIT(A)- VIII, New Delhi dated 25.10.2012 pertaining to the A.Y. 2009-10. 2. Facts in brief:- The assessee is a company and is engaged in the business of running a bonded warehouse and deals in import and redistribution of beverages etc. It filed its return of income on 30.9.2009 declaring total income of ₹ 1,37,02,525/-. After processing the return u/s 143(1) of the Income Tax Act, 1961 (the Act), the Assessin .....

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w, the Ld.CIT(A) had erred in deleting the addition of ₹ 5 lakhs made by the A.O. on account of foreign travel when the assessee could not file evidence/details to the effect that visits were undertaken for business purposes. 2. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was justified in deleting disallowance of ₹ 10 lakhs made by the A.O. on account of freight and cartage when there was abnormal increase in freight and cartage expenses as com .....

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ase and in law, the Ld.CIT(A) was justified in deleting disallowance of ₹ 10,74,962/- made by the AO as provisions of s.36(1)(va) r.w.s. 2(24)(x) when employees share was despotised late by the employer. ITA 515/Del/2013 (Assessee s Appeal) 1. That in the facts and circumstances of the case, the Ld.CIT(A) erred in confirming the disallowance made by the A.O. u/s 14A of ₹ 95,807/-. 2. That in the facts and circumstances of the case, the Ld.CIT(A) erred in confirming the adhoc disallow .....

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ircumstances of the case, on perusal of material on record, orders of the authorities below, case laws cited, we hold as follows. 5. We first take up Revenue s appeal in ITA 277/Del/2013. 6. Ground no.1 is against disallowance of ₹ 5 lakhs made by the A.O. on account of foreign travel. The disallowance was made on the ground that the assessee could not prove that all the foreign visits have been undertaken for the purpose of business. An adhoc disallowance has been made to cover expenses i .....

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and deleted the addition. We do not find any infirmity in this factual finding of the First Appellate Authority. The Ld.Sr.D.R. could not controvert the same. Thus this adhoc disallowance, in our view has been made by the A.O. on presumptions and surmises and is not based on any evidence. Thus, this ground of Revenue is dismissed. 7. Ground no.2 is on the deletion of disallowance on adhoc basis from out of freight and cartage expenses. The First Appellate Authority in this case also recorded th .....

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nditure incurred for the purpose of business was held as allowable. We do not find any infirmity in this order. All the books are audited and details were produced before the A.O. No infirmity in the evidences produced has been pointed out. Under these circumstances the question of disallowance that the expenditure that too on adhoc basis cannot be allowed. Hence we uphold the detailed and speaking order of the First Appellate Authority on this issue and dismiss this ground of Revenue. 8. Ground .....

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to disallow the said expenditure. The expenditure incurred on marketing and advertisement and promotional activities may not result in immediate jump in sales. On a sale of ₹ 33 crores the expenditure incurred is only ₹ 10.74 lakhs. It is not the case of the A.O. that the assessee has not incurred this expenditure or that he failed to substantiate with evidence, its claim of having incurred this expenditure. There is no defects pointed out in the evidence by the A.O. Thus we uphold t .....

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result this ground is dismissed. 11. In the result Revenue s appeal is dismissed. 12. ITA 515/Del/13 (Assessee s Appeal): The facts and submissions of the assessee have been brought out by the First Appellate Authority at pages 14 of his order which is extracted for ready reference. During the course of appellate proceedings, the appellant has submitted that details placed on record at paper book page 117. The AO stocks goods in bonded warehouse. At times, in the handling, and movement etc. Brea .....

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sumption for such goods are enclosed in the paper book. In view of the above it has been submitted that the disallowance made by the AO may be deleted. I have considered the submissions of the appellant findings of the AO and facts on record. Perusal of the facts on record show that the appellant has submitted that the goods had to be destroyed as they had outlived their shelf life. There are no evidences on record to show that on what basis it has been determined that the goods had outlived the .....

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