TMI Blog2016 (8) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... is line of business. The prospective buyers need to be convinced and taken to the respective sites to convince them. Assessing Officer has not brought anything on record to controvert that these expenses have not met by the buyers or sellers. In absence of such evidence, we have to go with assessee’s claim. The assessee has not maintained proper vouchers but spent it in cash. The Assessing Officer has rejected the submissions of the assessee and disallowed 50% of advertisement and 50% on other expenditures. In our considered view, Assessing Officer should have estimated the income. The assessee was admitting the net income in the earlier year at 16.13% against the gross receipts of ₹ 16.88 lakhs and in subsequent year, it has admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny separate business/income other than commission received on the plots sold through his efforts. For the Assessment Year 2008-09, the assessee has filed return of income on 29-09-2008 admitting an income of ₹ 9,95,940/-. The case was selected for scrutiny and a notice under Sec. 143 (2) 142(1) of the Income Tax Act,1961 (in short Act ) was issued. The Assessing officer completed the assessment under section 143(3) r.w.s. 144 on 24.12.2010 and determined the total income at ₹ 19,96,782/- by making the following additions: 1. Addition 50% of the total expenditure on account of Car Hire Charges, Vehicle Maintenance Travelling Expenses ₹ 15,22,830/- i.e., ₹ 7,11,415/-: 2. Addition 50% of the total expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant shown to have earned commission of ₹ 45,62,801/- from real estate company M/s.V.V.R.Housing Pvt. Ltd. for the year under reference against which a mere net profit of ₹ 10,48,625/- was arrived, which constitutes only 20% of commission receipts, after debiting various expenses, which included the amount of ₹ 15,22,830/- which in turn shown to have incurred in the form of car hire charges (Rs.8 ,87,720), vehicle maintenance (Rs.3,48,635/ - ) and travelling expenses (Rs.1,86,475). During the course of assessment proceedings no bills/vouchers and details related to such expenses were shown to have been produced before the AO, resulting in disallowance of 50% of such expenses. The appellant's contention was that, he bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee objected for such addition stating that the advertisement undertaken by the company M/S.V.V. R. Housing Pvt. Ltd. is at macro level. The appellant further submitted that the main activity of the assessee is to locate intending purchasers of plots and for this purpose the assessee has to go from door to door distributing pamphlets, pasting wall posters and other Hoardings at various locations and the material required for advertising is purchased by him and is distributed. The assessee also stated that since there are many agents working for the company, the assessee has to take intense steps for locating the purchasers and convince them to own a plot. 10. The CIT(A) after considering the submissions of the assessee, restricted the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponsibility of advertisement lies with the principal, as compared to the agent and also keeping the mode of incurring the expenses in mind, the disallowance of 40% of such expenses is justifiable, as against 50% made by the Assessing Officer in the assessment order. Accordingly, the disallowance is restricted to 40% of 6,07,800/-. Thus, the grounds related to this issue are treated as partly allowed. 11. Before us, ld. AR submitted that CIT(A) erred in sustaining the income of assessee 40% of the aggregate expenditure by holding that the assessee could not produce any information regarding the expenses. He contended that the CIT(A) ought not to have sustained the addition. The ld. AR submitted that the CIT(A) erred in sustaining addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to spend. The Assessee had earned the income and we are not aware of the difficulties in earning the income in this line of business. The prospective buyers need to be convinced and taken to the respective sites to convince them. Assessing Officer has not brought anything on record to controvert that these expenses have not met by the buyers or sellers. In absence of such evidence, we have to go with assessee s claim. The assessee has not maintained proper vouchers but spent it in cash. The Assessing Officer has rejected the submissions of the assessee and disallowed 50% of advertisement and 50% on other expenditures. In our considered view, Assessing Officer should have estimated the income. The assessee was admitting the net income in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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