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2016 (11) TMI 1068 - ITAT MUMBAI

2016 (11) TMI 1068 - ITAT MUMBAI - TMI - Disallowance of salary, commission and staff welfare expenses - Held that:- On seeing the peculiar facts and circumstances of the case where the salary of the employees has been disallowed merely on account of non-verification of the employees and on the basis of non-verification of the person to whom the commission was paid in cash does not seems justifiable specifically on account of the fact that the record was properly maintained by the assessee. Reco .....

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d staff welfare allowance to the tune of ₹ 75,419/- Decided against revenue - Disallowance to the extent of 50% of sale promotion expenses - Held that:- Assessee furnished the reasonable details of these expenses in the form of copies of voucher and ledger account etc. Therefore, in the said circumstances, we are of the view that the disallowance to the extent of 50% towards the sale promotion expenses to the tune of ₹ 3,15,890/- is of the higher side and the end of the justice w .....

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vouchers and bills are not possibly produced by the assessee, therefore, in the said circumstances the CIT(A) has restricted the addition to the extent of 50%. Therefore, in the said circumstances we are of the view that the disallowance to the extent of 50% of all the expenses above mentioned are of the higher side and the end of the justice would be meet if the disallowance be restricted to the extent of 25% respectively. - Decided against revenue - I.T.A. No.1426/MUM/15 - Dated:- 23-9-2016 - .....

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f ₹ 4,06,801/- and the Ld. CIT(Appeals)-36 by disallowing the same by 50% i.e. ₹ 203400/- but the salary was fully allowed by the first ITO while passing the order for the first time. The salary should be fully allowed as done in the first order. 2. The Ld. Assessing Officer has erred in law and in facts by disallowing commission fully and the CIT(Appeals)-36 by disallowing 50% of the same. It should be fully allowed as full details were provided to the ITO and the CIT(A)-36. The dis .....

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₹ 157,945/- respectively. This is done arbitrarily and without any base. 5. The Ld. ITO and CIT(A)-36 erred in law and in facts by disallowing Travelling Expenses of ₹ 88,344/- and ₹ 44,172/- respectively. This is done arbitrarily and without any base. 6. The Ld. ITO and CIT(A)-36 erred in law and in facts by disallowing Telephone Expenses of ₹ 23,660 and ₹ 11,830/- as full details were provided of Telephone No. and amount of each bill. 7. The Ld. ITO and CIT(A)-36 .....

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t any base. 10. The Ld. CIT(A)-36 and Ld. ITO have erred in law and in facts in levying interest u/s.234B and 234C of the Act. 3. The facts of the case are that the appellant is a HUF and filed its return of income for A.Y 2004-05 on 30.10.2004 declaring total income to the tune of 1,19,370/-. The original assessment was completed vide order dt. 30.11.2006 u/s 143(3) determining its total income to the tune of ₹ 18,17,430/-. The appellant carried the matter up to the Tribunal and vide orde .....

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23,660/- vii Conveyance : ₹ 10,850/- viii Office expenses : ₹ 19.770/- ix Net income of HMV Investment : ₹ 92,434/- Thereafter, the assessee filed an appeal before the CIT(A) and partial relief was granted by the learned CIT(A) allowing 50% of the amount in dispute. However, the assessee was not satisfied, therefore, the present appeal has been filed before us. ISSUE NO.1, 2 &3:- 4. The assessee has shown the salary expenses to the tune of ₹ 4,06,801/- and commission .....

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Mishra. However, Mr. Anant Panda and Mr. Chidanand Godimani did not respond to the notice. Accordingly, on account of non appearance, the staff welfare allowance remained unexplained therefore the Assessing Officer disallowed the salary to the tune of ₹ 4,06,801/- and commission to the tune of ₹ 2,83,700/- and staff welfare allowance to the tune of ₹ 75,419/- and added in the income of the assessee. Subsequently, the CIT(A) disallowed 50% of the salary, commission and staff wel .....

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tent of ₹ 800/- per person per month which also seems justifiable. The CIT(A) was of the view that the records seems justifiable and the expenses does not seems on higher sides therefore disallowance was restricted to the extent of 50%. On seeing the peculiar facts and circumstances of the case where the salary of the employees has been disallowed merely on account of non-verification of the employees and on the basis of non-verification of the person to whom the commission was paid in cas .....

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o the extent of 25% on account of salary to the tune of ₹ 4,06,801/- and commission to the tune of ₹ 2,83,700/- and staff welfare allowance to the tune of ₹ 75,419/- . We ordered accordingly. Accordingly, these issues have been decided in favour of the assessee and against the Revenue. ISSUE NO.4:- 5. Under this issue the assessee has challenged the confirmation of disallowance to the extent of 50% of sale promotion expenses to the tune of ₹ 3,15,890/-. Assessing Officer .....

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ustomers in order to attract the business. However, assessee furnished the reasonable details of these expenses in the form of copies of voucher and ledger account etc. Since the 7 years has been lapsed therefore, the assessee did not retain the relevant vouchers. Considering all these facts, the CIT(A) restricted the disallowance to the extent of 50%. The CIT(A) was satisfied with the explanation of assessee. After the expiration of 7 years the record could not be produce properly. However, ass .....

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ssue has been decided in favour of the assessee and against the Revenue. ISSUE NO.5 to 9:- 6. Under these issues the assessee has challenged the disallowance of travelling expenses to the tune of ₹ 88,344/-, telephone expenses of ₹ 23,660, conveyance expenses of ₹ 10,850, office expenses of ₹ 19,770/- and disallowing expenses of HMV Enterprises of ₹ 92,434/-. The Assessing Officer disallowed the said expenses being not supported by bills and vouchers. The travelling .....

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