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TMI Blog2016 (1) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... " 2. In this case, this issue has been set aside by the ITAT vide order dated 11/2/2011 in ITA No. 1234/JP/2010 A.Y. 2005-06. The operative portion of the order is reproduced as under:- "6. After considering the submissions and perusing the material on record, we find that this issue needs re-verification at the end of the AO. The expenses on advertisement and sales promotion have increased substantially whereas turnover of the assessee has increased marginally. No plausible explanation has been given either before AO or before ld. CIT (A) that how such increase has been occurred on account of these expenses. As per orders of AO and ld. CIT (A), full details were not filed. On the other hand, ld. Counsel of the assessee stated that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 67,89,275/-. It is further noticed that the gross sales of the assessee have increased to Rs. 453,56,81,999/- as compared to gross sales of Rs. 424,33,09,514/- during the immediately preceding year, but the expenditure on advertisement and sales promotion has increased drastically to Rs. 63,98,61,831/- from Rs. 46,50,26,077/- during the last year. The complete bills and vouchers to justify these expenses have not been provided. There is no justification for such increase in advertisement and sales promotion expenses. In the absence of complete bills and vouchers of these expenses it cannot be established that all the expenditure was "wholly and exclusively for business". Non business expenditure under this head cannot be ruled out and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant has not been able to controvert the findings given by the A.O. and has made bald statements to justify the claim of expenses under this head. The percentage of expenses to sales claimed under this head has increased from 10.96% in the preceding year to 14.11% in the current year. The turnover has increased marginally from Rs. 424.33 crores in the preceding year to Rs. 453.56 crores in the current year. Thus, I agree with the action taken by the A.O. and accordingly confirm the ad hoc disallowance of Rs. 50 lacs made by the A.O. 4. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that in the set aside proceedings, assessee has specifically drawn the attention of the AO to the CD containing the complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure has increased to boost the sale. The assessee has therefore, to incur higher advertisement expenditure to increase the sales. It may also be noted that in A.Y. 06-07, 07-08 and 09- 10, where the expenditure is more/comparable as compared to the year under consideration, the AO has not made any disallowance in assessment framed u/s 143(3). So far as details of advertisement and sales promotion expenditure are concerned, the assessee has furnished the complete details. Such details were furnished in a CD due to its voluminous nature (the hard copy containing more than 30,000 individual entries running into around 600 pages). The summary of the expenditure was provided in the hard copy. From the same, it can be noted that out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Oracle India (P) Ltd. 199 Taxman 181 (Del) (HC) (Mag.). 7. Arthur & Anderson & Co. Vs. ACIT (2010- TIOL-416-ITAT). In view of above, the disallowance confirmed by the CIT(A) be directed to be deleted. 5. At the outset, the ld DR has vehemently supported the order of the ld CIT(A) and argued that the assessee's expenses under this head is disproportionate with reference to sale and also has not been able to give the part vouchers of the expenses before the Assessing Officer. Therefore, he prayed to confirm the order of the ld CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on the record. It is undisputed fact that percentage of expenses on advertisement and sales promotion with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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