TMI Blog2019 (11) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 A.O. disallowed 10% out of total expenses only. Therefore, considering the rule of consistency, the A.O. at best should have disallowed 10% out of sale promotion expenses instead of making the impugned addition in the assessment year under appeal. Set aside the Orders of the authorities below and restrict the disallowance out of total sale promotion expenses in 10% only. The addition is restricted to ₹ 4,10,534/-. Appeal of assessee is partly allowed. - ITA.No.7488/Del./2018 - - - Dated:- 15-11-2019 - Shri Bhavnesh Saini, Judicial Member For the Assessee : Shri V.K. Jain, C.A. And Shri Vikas Singh, C.A. For the Revenue : Shri Pradeep Singh Gautam, Sr. D.R. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romotion expenses and copies of 6 month hotel bills in the name of the assessee company. The A.O. issued notice under section 133(6) of the I. T. Act, 1961 to the Lodhi Hotel to verify the details of the facilities availed by the assessee company, duration, purpose and other details during the financial year. When no reply has been filed by the hotel, another notice under section 133(6) was issued. The Counsel of the Lodhi property company Ltd. submitted part information. Finally, summons under section 131 issued to the Hotel. In response thereto, Mr, Dheeraj Gupta, appeared and submitted a reply stating the details of guest, agreement along with ledgers. The A.O. issued show cause notice to assessee as to why the business promotion expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates, Directors stayed in Hotel, it does not mean that the hotel is not used for business purpose. The assessee company has filed all the relevant documents and Management Certificate etc., to prove that accommodation in the Hotel was used for business purpose. It was submitted that statement of Shri Dheeraj Gupta, Authorised Representative of Lodhi Hotel was recorded in the absence of assessee without allowing for crossexamination, therefore, such statement cannot be read in evidence against the assessee. The assessee relied upon decision of Hon ble Supreme Court in the case of Kishanchand Chellaram 125 ITR 713 (SC). The Lodhi Hotel has confirmed user of the accommodation by the assessee company for busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has been provided one two bed room apartment in Lodhi Hotel. The payment made by assessee has been confirmed. Copy of the sample bill and agreement Dated 05.04.2013 is filed at page-74 of the PB. Learned Counsel for the Assessee submitted that payment to Lodhi Hotel is not in dispute. He has submitted that on the basis of the same agreement in A.Y. 2013-2014, A.O. disallowed 10% sale promotion expenses of ₹ 4,57,205/- in the Order under section 143(3) Dated 14.03.2016, copy of the same is placed on record. He has submitted that in A.Y. 2014-2015 no disallowance have been made as return is processed under section 143(1). In subsequent A.Y. 2016-2017, A.O. passed Order under section 143(3) Dated 09.12.2018 in which no similar di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation of assessee that the assessee company since having registered office at Sainik Farm, which is quite far from Central Delhi, therefore, it was difficult for assessee company to have business transaction with the guests, therefore, accommodation is taken in Lodhi Hotel for business purpose only. The assessee produced all the bills/vouchers etc., that assessee made genuine payment to Lodhi Hotel which are not in dispute. Considering the totality of the facts and circumstances of the case and in the light of long staying guest agreement and other material on record which is also confirmed by the owner of the property in question, it is clear that assessee had taken the accommodation in Lodhi Hotel for business purposes only and used ..... X X X X Extracts X X X X X X X X Extracts X X X X
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