TMI Blog2018 (1) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... he concerned 3 persons at the fixed rate on monthly basis for the specified services rendered by them, there was bound to be an oral contract on the basis which the services were agreed to be rendered on retainership basis. The assessee, therefore, was liable to deduct tax at source in terms of section 194C and having failed to do so, the amount in question was liable to be disallowed under section 40(a)(ia). - Decided against assessee. Addition of installation and delivery expenses - CIT-A sustained 50% expenses - Held that:- Disallowance made by the A.O. for such expenses entirely was not justifiable keeping in view the nature of the assessee’s business of dealing in electronic goods which very much required incurring of expenditure on installation and delivery charges on regular basis - Disallowance made by the Ld. CIT(A) vide his impugned order is excessive and unreasonable and having regard to all the facts of the case including especially the nature of assessee’s business as well as the quantum of expenditure claimed, it would be fair and reasonable to make a disallowance of 50% out of installation and delivery charges to 25%.- Decided partly in favour of assessee Disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to M/s. Latest Publicity House. He also pointed out that the said party was regularly assessed to tax and relevant documentary evidence in this regard was also filed by the assessee. The enquiry sought to be made by the A.O. at the telephone numbers printed on the bills of Latest Publicity House filed by the assessee however revealed that the said telephone numbers belonged to some third parties. The A.O., therefore, held that there was no verification possible of the claim of the assessee of having paid the amount of ₹ 15,69,950/- to M/s. Latest Publicity House towards hoarding charges and gift articles in the absence of correct business address or telephone number. He, therefore, concluded that the claim of the assessee on this count was bogus/unverifiable and the deduction claimed by the assessee amounting to ₹ 15,69,950/- on account of advertisement and sales promotion expenses was disallowed by him in the assessment under section 143(3) vide an order dated 2nd December, 2010. 5. Against the order of the A.O. passed under section 143(3), an appeal was preferred by the assessee before the Ld. CIT(A) and the submissions made before the Assessing Officer on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not verifiable in the absence of correct address of the said party given by the assessee. In my opinion, when the permanent account number as well as other particulars of the income tax assessment of the said party were placed on record before the A.O., he could have easily verified the claim of the assessee directly with the said party instead of harping on the failure of the assessee to give the correct address or produce the said party for verification. As regards the claim of the assessee for deduction of ₹ 4,44,950/- paid to M/s. Latest Publicity House for supply of gift articles, I however find that it is not supported by any relevant documentary evidence such as bills, delivery challans, vouchers etc and in the absence of the same, the claim of the assessee for the said expenses cannot be allowed. I, therefore, modify the impugned order of the Ld. CIT(A) on this issue and sustain the disallowance of ₹ 15,69,950/- made by the A.O. on account of advertisement and sales promotion expenses to the extent of ₹ 4,44,950/-. Ground no 3 of the assessee s appeal is thus partly allowed. 7. The issue raised in ground no 4 relates to the disallowance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deduct tax at source in terms of section 194C and having failed to do so, the amount in question was liable to be disallowed under section 40(a)(ia). I, therefore, find no infirmity in the impugned order of the Ld. CIT(A) confirming the disallowance made by the A.O. under section 40(a)(ia) and upholding the same, I dismiss ground no 4 of the assessee s appeal. 10. The issue involved in ground no 5 relates to the disallowance of ₹ 2,68,689/- made by the A.O. of installation and delivery expenses which is sustained by the Ld. CIT(A) to the extent of 50%. 11. In the P L A/c, a sum of ₹ 2,68,689/- was debited by the assessee on account of installation and delivery expenses. On verification of the said expenses, it was found by the A.O. that a sum of ₹ 1,000/- was paid by the assessee for matador hire charges towards each trip. Although the assessee produced vouchers in support of its claim for installation and delivery charges, the A.O. found that the address of the owners as well as the registration numbers of the vehicles were not given in the said vouchers. In the absence of the said details, Assessing Officer held that the claim of the assessee for ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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