TMI Blog2018 (12) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... d not produce material and documents to show that the expenditure under the aforesaid heads was incurred wholly exclusively for the purpose of business. The findings of the Assessing Officer affirmed in the appeals are factual. Nothing has been placed before us to show that these findings are perverse and contrary evidence and material on record. No substantial question of law therefore arises on account of ad-hoc disallowance of expenses under the head business promotion and dress and costume expenses. - decided against assessee. - ITA 1249/2018 and ITA 1250/2018 - - - Dated:- 12-11-2018 - MR. SANJIV KHANNA AND MR. ANUP JAIRAM BHAMBHANI JJ. Appellant Through: Mr. S. Nandakumar with Mr. R. Satish Kumar, Ms. Deepika Nandakumar and Mr. S. Kumar Jha, Advocates. Respondent Through: None. SANJIV KHANNA, J. (ORAL): These appeals filed by the appellant-Sandeep Marwah under Section 260A of the Income Tax Act, 1961 (in short the Act ) relate to assessment years 2007-2008 and 2008-2009 and arise from a common order dated 25.05.2018 passed by the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal ). 2. First grievance of the appellant is against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 37(1) is on the assessee. If, therefore, the assessee fails to establish the facts necessary to support his claim for deduction under Section 37(1), the claim for deduction of expenditure is not admissible. Further in the case of I.H. Sugar Factory oil Mils (Pvt.) Ltd. Vs. CIT (1980) 125 ITR, 293 (SC) the Hon ble Supreme Court has held that where an assesee claims a deduction the onus is on him to bring all material facts on record to substantiate his claim. The assesse did not furnish or produce any evidence as to what was the expenditure and why it was incurred. The assessee has thus failed to qualify the first test of Section 37(1) of the Income Tax Act, 1961. Mere claiming that the expenses were incurred through bank and evidence of payment is available with bank did not itself make the expenditure allowable in the case of assessee as something more is required to allow the deduction U/s 37(1) of the Income-Tax Act, 1961. The assessee vide reply on the issue has claimed to have requested tobank for providing copy of bills to him. In this regard, I would like to put on record that whenever an expenditure is incurred or nay item is purchased through credit card, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1975) 101 ITR 221 (SC)/ Sasson J. David co.(P) Ltd. V.CIT (1979) 118 ITR 261 (SC). In the case of CIT v. Shahibag entrepreneurs (P) Ltd. (1995) 215 ITR 810 (Guj), it was held that it cannot be disputed that before an assessee can become entitled to an allowance under Section 37(1), he must satisfy the department of the purpose for which the amount is spend. In view of this, the expenses claimed by assessee under the head business promotion and dress costume are not allowable as such as claimed by assessee. I understand that for running every business, these nature of expenses are incurred and allowable. However, considering the facts of the assessee s case and also material produced before me, I restrict the expenses to 50% of assessee s claim and make a disallowance of ₹ 8,20,927/- and ₹ 2,17,605/- from business promotion and dress and costume respectively. 4. The findings recorded by the Assessing Officer vide the assessment order dated 26.11.2011 for the assessment year 2008-2009 read as under: During the course assessment proceedings it was noticed that the assessee has incurred an amount of ₹ 10,37,904/-towards business promotion. From the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange I Lucknow. 7. We do not agree. Requirement of Section 37 is that the expenditure should be wholly and exclusively laid out and expended for the purpose of business. Merely because payments were made through credit card would not show that the expenditure was wholly and fully for the purpose of business. This contention was rightly rejected by the assessing officer, as nature and object of the outgoing has to be also examined. Word wholly refers to quantum of expenditure and word exclusively refers to motive, object and purpose of the expenditure. Personal expenses or money spend for private purpose is not deductible. They fail the business expediency test. Further, whether the expenditure was incurred wholly and fully for the purpose of business has to be established and proven by the assessee. These facts are within the exclusive knowledge of the assessee and therefore he is under an obligation to place all facts and circumstances before the authorities. Order for the assessment year 2007-08 refers to failure and nonfurnishing details and particulars. Similarly order for the assessment year 2008-09 refers to the three expenditures totaling ₹ 1,56,513/- regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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