TMI Blog2018 (3) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal or the Hon’ble High Court. In view of above, no such disallowance can be made on adhoc basis. Charging of interest on dividend distribution tax (DDT) - Held that:- It is observed from record that no discussion whatsoever was made by the AO in the assessment order in this regard. Inspite of which, the assessee raised a issue before the CIT-A challenging the said addition. The CIT-A did not adjudicate the issue as there was no such issue decided by the AO. In view of the same, we remand the matter to the file of the AO to decide and adjudicate the same afresh. - I.T.A No. 68/Ran/16, I.T.A No. 69/Ran/16 - - - Dated:- 1-3-2018 - Shri J. Sudhakar Reddy, Accountant Member And Shri S.S. Viswanethra Ravi, Judicial Member For the Appellant : Shri Rajiv Ranjan Mittal, Advocate, ld.AR For the Respondent : S/Shri Sanjay Prasad, CIT(A), ld.Sr.DR Sanjay Malik, JCIT, ld.DR ORDER Per Bench Above two appeals by the Assessee are against the separate orders dt. 18-12-2015 of CIT(A), Jamshedpur for the assessment year 2011-12 2012-13 respectively. Since the issues raised in both the appeals are common except variance of figures in amount, and on same set of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the turnover of the assessee has increased constantly from 68.44 crores in the A.Y 2007-08 to ₹ 135.66 crores in the A.Y under consideration. He further argued that there is a considerable increase in the market share from the existing customer as well as from the new customers and the said expenditure is incurred only for the commercial purpose. He also submits that the assessee has not incurred any expenditure covered u/s. 37(2) of the Act and considering the turnover of ₹ 135.66 Crores advertisement expenses claimed is meager. There is no specific item brought on record by the AO and made addition on adhoc basis is not sustainable in the eye of law. He submitted that entire advertisement expenses of ₹ 4,01,828/- is liable to be allowed being business expenditure. 8. On the other hand, the ld.DR relied on the orders of AO CITA. 9. Heard rival submissions and perused the record. We find from the assessment order that in response to notices issued u/s. 143(2) and 142(1) of the Act by the AO, the assessee produced the books of account, bank statement, cash book, ledger account of expenses and details of other items i.e interest income, bills and vouchers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lving personal elements and disallowed ₹ 2,43,617/- and added the same to the total income of assessee. 13. The ld. CIT-A after considering the submissions of assessee and by relying on the orders of the Hon ble Supreme Court in the case of CIT Vs. Kalkattaa Agency Ltd reported in (1951) 19 ITR 191 (SC) and the Hon ble Karnataka High Court in the case of J.K Panthaki Co. Vs. ITO reported in (2012) 22 Taxmann. Com 49 (Kar) confirmed the addition made by the AO. 14. Before us the ld.AR submits that the orders of lower authorities were bad in law and contrary to the facts on record. In support of his contention, he referred to written submissions filed before us and argued that there is no such disallowance in the past year since inception of the company. The expenses have been incurred for serving tea, coffee, lunch, dinner or snacks at different restaurant and clubs for the staff as well as customers and other persons including MD s office for the purpose of business. The assessee company has incurred ₹ 4,87,234/- for the entire year under consideration on total turnover of ₹ 135.66, which is meager and reasonable and allowable u/s. 37 of the Act. The AO m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ye of law. Therefore, ground no.2 relating to addition of ₹ 2,43,617/- made on account of entertainment expenses and hospitality expenses confirmed by the CIT-A is deleted. 18. Ground no. 3 is relating to confirmation of addition of Rs. ,36,768/- on account of festival celebration, gift and presents and general expenses. 19. On perusal of P L account the AO found that the assessee debited an amount of ₹ 13,47,0743/- under the following heads which seems to be excessive and personal in nature:- Nature of Expenses Amount (Rs.) Festival Celebration 20,000/- Gift Presents 3,41,474/- General Expenses 9,85,599/- Total 13,47,073/- 20. In support of claim of above expenditure of ₹ 13,47,073/- the assessee produced ledgers and vouchers for proving the said expenditure. The AO found that internal vouchers are not correlated with reference to third party evidence. In view of assessee s submissions and turnover of assessee for the A.Y under reference, the AO p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no such issue decided by the AO. In view of the same, we remand the matter to the file of the AO to decide and adjudicate the same afresh in the light of submissions of assessee as available before the AO. The AO shall pass a fresh order as per law, after giving the assessee adequate opportunity of hearing. The assessee is at liberty to file requisite evidences in support of the contention and claim. Therefore, ground no. 4 raised by the assessee is allowed for statistical purpose. 27. The appeal of assessee in ITA No. 68/Ran/2016 for the A.Y 2011-12 is allowed in part. 28. Now, we shall take up the appeal in ITA No. 69/Ran/2016 for the A.Y 2012-13. 29. Ground no. 1 is relating to confirmation of disallowance of ₹ 49,42,950/- by the CIT-A on account of following expenditure incurred by the assessee:- Sl.No. Nature of Expenses Amount (Rs.) 1. Other Expenses 2,37,70,000 2. Travelling Expenses 47,34,000 3. Advertisement, Promotion Selling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be charged on declared returned income and not on assessed income as per decision of the of the Hon ble Jurisdictional High Court in the case of Shri Ajay Prakash Verma in TA No. 38 of 2010 reported in 2013(1)TMI 140, which in turn, followed the law laid down by the Full Bench in the case of Smt. Tej Kumari reported in 114 Taxman 404 (PAT) (FB), where it was held that interest cannot be levied on assessed income and it can be levied only on the income declared in the return of income. The appellant Revenue challenged the same before the Hon ble Supreme Court by way of a SLP, which was dismissed by holding that there is no merits in the appeal vide its order dt. 01-08- 2000. The ld. DR could not controvert the same. 36. We further find the Co-ordinate Bench, ITAT, Ranchi in the case of RSB Industries Ltd(Formerly known as M/s. Lal Technologies Ltd) Vs. ACIT, ITA Nos. 199 200/Ran/2014 and 212 213/Ran/2014 for the A.Ys 2009-10 2010-11 and in the case of Shree Niwas Joshi Vs. ACIT, ITA Nos. 279 280/Ran/2016 for the A.Ys. 2001-02 2005- 06, copy of the same are on record, on similar set of facts and circumstances has disposed of the said issue in favour of assessee by d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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