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Golden Trust Financial Services, Kolkata, ACIT Versus DCIT, Kolkata, Golden Trust Financial Services

2016 (1) TMI 719 - ITAT KOLKATA

Addition of an expenditure for Business/Sales promotion Expenses - Held that:- From a perusal of the statement, it is clear that the assessee has filed complete details of the bills and vouchers in respect of the entire sales promotion expenses. The CIT(A)'observation that the appellant had produced all bills relating to sales promotion except to the extent of ₹ 1,38,32,946/- is there fore incorrect. It is further noticed that in respect of payment made to P.A.Time Industries, no bills and .....

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nses. AO/CIT(A) have not given any valid basis as to why these expenses should not be regarded as permissible deduction. CIT(A) having accepted that the expenditure in question is wholly and exclusively for the purpose of business of the assessee ought to have allowed the entire deduction. He ought not to sustained part of the addition on a wrong assumption that bills in relation to a part of the expenditure were not filed by the Assessee and on this basis sustained part of the disallowance made .....

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-12-2015 - N. V. Vasudevan, JM And Waseem Ahmed, AM For the Appellant : Dr Somnath Ghosh, FCA For the Respondent : Shri Uday Kr Sarkar, JCIT, Sr DR ORDER Per Shri N V Vasudevan, JM ITA No.1751/Kol/2012 is an appeal by the assessee while ITA No.214/Kol/2013 is an appeal by the revenue. Both these appeals are directed against the order dated 22.11.2012 of CIT(A)-XXXVI, Kolkata relating to A.Y.2007-08. 2. Ground No.1 raised by the assessee in this appeal was not pressed and the same is dismissed as .....

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enses." Revenue's Grounds of appeal "(1) That on the facts and circumstances of the case the learned CIT(A) has erred in deleting addition of ₹ 2,66,66,749/- out of total disallowance/addition of ₹ 4,16,65,896 made by AO in respect of sales promotion expenses relying on the submission and bills for cost of the purchase submitted by the assessee .. (2) That on the facts and circumstances of the case the learned CIT(A) has erred in deleting the additions of ₹ 2,66,6 .....

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e to earn business by the assessee." 4. The facts with regard to the above said grounds are as follows : The assessee is a firm. It is engaged in the business of acting as corporate agent of life insurance products. In the course of assessment proceedings the AO noticed that the assessee had claimed as deduction while computing business income a sum of ₹ 4,04,99,695/- under the head "Business/sales promotion Expenses". AO disallowed the claim of the assessee for deduction of .....

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l the required evidence which were also before the AO and submitted that the expense in question was wholly and exclusively incurred for the purpose of business of the assessee. 6. The CIT(A) after taking consideration of the photo copies of the bills and evidences of payment of the expenses through banking channels concluded as follows:- "Matter was examined in details. Appellant was asked to produce all bills relating to business promotion and sales with various schemes. Appellant produce .....

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wance and balance of ₹ 2,66,66,749/- is deleted. Appellant gets relief of ₹ 2,66,66,749/." 7. Aggrieved by the relief given by the CIT(A) revenue has raised ground nos. 1 to 3 . Aggrieved by order of CIT(A) sustaining a part of disallowance made by AO, assessee has raised ground no.2 before the Tribunal. 8. We have heard the rival submissions and perused the evidence on record. At pages 62 to 93 of the paper book filed by the assessee the photo copies of the bills and vouchers r .....

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that the assessee has filed complete details of the bills and vouchers in respect of the entire sales promotion expenses. The CIT(A)'observation that the appellant had produced all bills relating to sales promotion except to the extent of ₹ 1,38,32,946/- is there fore incorrect. It is further noticed that in respect of payment made to P.A.Time Industries, no bills and vouchers have been filed. The payments to this party totalling ₹ 8,70,000/- is negligible compared to the volume .....

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CIT(A) having accepted that the expenditure in question is wholly and exclusively for the purpose of business of the assessee ought to have allowed the entire deduction. He ought not to sustained part of the addition on a wrong assumption that bills in relation to a part of the expenditure were not filed by the Assessee and on this basis sustained part of the disallowance made by the AO. 9. For the reasons given above we allow ground no.2 raised by the assessee and dismiss ground nos. 1 to 3 ra .....

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. Before CIT(A) the assessee explained that these branches are mostly rural and semi urban areas. Some times the staffs are deputed on temporary basis from one branch to another, though their salaries are paid from the branches in which they were originally posted. This is done because of the human resource deployment strategy of the firm. So, no branch was left without any staff at any point of time. However, if only salary register is considered, it may happen that it will portray that a branc .....

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