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TMI Blog2016 (1) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... as erred in law and on facts in deleting the disallowance of R.2,82,937/- made on account of business promotion expenditure, without appreciating the facts that the assessee could not substantiate its claim with tenable evidences." 3. So far as this ground of appeal is concerned, the relevant material facts are like this. During the course of scrutiny proceedings, the Assessing Officer noted that the assessee has incurred business promotion expenses mounting to Rs. 11,74,510/- which are far in excess of the business promotion expenses of Rs. 1,54,899/- incurred in the immediately previous year. It was in this backdrop that the details of business promotion expenses were called for and examined. The Assessing Officer noted that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Authorised Representative with regard to domestic business promotion expenditure of Rs. 3,82,937/- submitted that major expenditure incurred is in respect of petrol, air tickets, restaurant charges, hotel rent charges, memento etc. incurred for the business of the Appellant only and accordingly page nos.4 to 35 of Paper Book was referred. So far as the observation of the AO that the credit card statements are in the name of Managing Director Mehulbhai Zaveri and therefore, the expenditure incurred are not for the purpose of business of the Appellant is concerned, the authorised Representative argued that merely because the same has been incurred through the credit card of the director of the Appellant, it cannot be suspected that the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- out of total domestic business promotion expenditure of Rs. 3,82,937/- and balance disallowance amount of Rs. 2,82,937/- is deleted hereby." 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position. We have noted that so far as the disallowance for business promotion is concerned, the major portion of the expenses i.e. Rs. 7,88,883/- pertains to expenses incurred abroad and foreign travel. This disallowance has already been deleted and the Assessing Officer is not in appeal. As regards balance amount of Rs. 3,82,937/-, the ld. CIT(A) has already confirmed the disallowance to the extent of Rs. 1,00,000/- in respect of element of personal expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is in appeal before us. 7. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position. We find that, as noted by the ld. CIT(A), the assessee has share capital of Rs. 2,97,21,600/- and accumulated profit to the extent of Rs. 2,20,75,710/-. Clearly, therefore, the assessee has sufficient non-interest bearing funds which covers more than the interest free advance of Rs. 45,00,000/- to its director. In view of this factual position and in the light of Hon'ble Bombay High Court's judgement in the case of CIT vs. Reliance Utilities 313 ITR 340, which holds that as long as sufficient interest free funds are available to an assessee, no disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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