TMI Blog2021 (9) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- lump sum on estimate basis out of these expenses will meet the ends of justice - as hold and direct accordingly. Grounds of Appeal by the assessee are accordingly partly allowed. - ITA. No. 8674/Del./2019 - - - Dated:- 16-9-2021 - SHRI R. K. PANDA, ACCOUNTANT MEMBER For the Assessee : Shri Sanjay Sood, C.A. For the Revenue : Shri Vijay Kumar Kataria, SR DR ORDER This appeal filed by the Assessee is directed against the order dated 30.08.2019 of the Ld. CIT(A), New Delhi, relating to the A.Y. 2015-2016. 2. Facts of the case, in brief, are that the assessee is an individual and the proprietor of Consolidated Products Corporation which is involved in trading and sale/purchase of medical equipments, devices etc. He filed his return of income on 28.10.2015 declaring total income of ₹ 10,45,000/-. During the course of assessment proceedings, the A.O. noted from the computation of income that assessee has claimed marketing expenses of ₹ 35 lakhs being deferred revenue expenditure incurred by the assessee during the year under consideration. He observed from the P L A/c that assessee has shown Marketing Expenses of ₹ 35 lakhs under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 35 lacs had been charged in Profit Loss a/c in each of these years, but the same has been added back in computation of income, is also afterthought of the assessee and having no relevance. Without prejudice to this in both years, i.e. in A.Y.2016-17 2017-18 huge losses are suffered by the assessee. At the time of filing of ITR for A.Y.2015- 16 which was filed by the assessee on 28/10/2015, assessee was aware that he is going to suffer huge loss in F.Y.2015-16 relevant to A.Y.2016-17, due to that the assessee has changed the view' and claimed the whole marketing expenses in the year under consideration. 3.5. Since, the marketing expenses as claimed by the assessee himself, are to be written from next year and to protect the interest of revenue, the whole marketing expenses i.e. ₹ 35 lacs, claimed entirely by the assessee in the year under consideration are hereby disallowed and added back to the income declared by the assessee for the year under consideration. I am satisfied that the assessee has willfully and deliberately furnished inaccurate particulars of his income and thereby concealed income of ₹ 35 lacs on a/c of marketing expenses and is therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant s case, it is seen that appellant has not given any basis as to why expenditure has been deferred- neither the nature and type of expenditure justifies appellant s claim. It is also to be noted that it is not the accounting practice of appellant to defer the expenditure. Therefore, I find no basis to interfere in the order of AO. Accordingly, ground no. 1 is dismissed. 2.7. Similarly the Ld. CIT(A) restricted the disallowance of ₹ 88,979/- to ₹ 44,490/-. 3. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds : 1. THAT in the facts and circumstances of the case, the CIT(A) erred in making addition on account of marketing expenses of ₹ 35,00,000/-. 2. THAT in the facts and circumstances of the case, the CIT(A) erred in confirming the ad hoc disallowance, on account of vehicle running maintenance expenses claimed to the extent of ₹ 14,686. 3. THAT in the facts and circumstances of the case, the CIT(A) erred in confirming the ad hoc disallowance, on account of Depreciation on car claimed to the extent of ₹ 11,653/-. 4. THAT in the facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are concerned, he submitted that the same are on the higher side and the addition sustained by the Ld. CIT(A) should be deleted. 5. On the other hand, the Ld. D.R. relied on the Order of the A.O. and the Ld. CIT(A). 6. I have considered the rival arguments made by both the sides, perused the orders of the A.O. and Ld. CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. The first issue to be decided in the grounds of appeal as per Ground of Appeal Number.1 is allowability of marketing expenses of ₹ 35 lakhs as revenue expenditure. 6.1. As mentioned earlier, marketing expenditure in the instant case includes expenditure on travel, business promotion, conferences etc., and the genuineness of the expenditure is not in dispute. The assessee in the instant case has shown the entire marketing expenses of ₹ 35 lakhs in the balance sheet under the Head Advances , but, claimed the same in the computation of income as revenue expenditure which was disallowed by the A.O. I find the Ld. CIT(A) also sustained the addition made by the A.O, the reasons of which have already been reproduced in the precedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 37 of the Act, it had to be allowed. 6.3. Similar view has been taken by the Coordinate Bench of the Tribunal in the case of DCIT, Circle-12(1), New Delhi vs., Hitz FM Radio India Ltd., (supra) wherein it has been held that there is no Law under the Act to say that revenue expenditure is deferred revenue expenditure. It has been held that when A.O. had himself admitted that expenditure in question was a revenue expenditure, he should have allowed the entire claim of assessee in assessment year in question itself. In this view of the matter, I hold that the Ld. CIT(A) was not justified in disallowing the marketing expenses of ₹ 35 lakhs as revenue expenditure in the year under consideration. Therefore, the Grounds of Appeal Number.1 of the assessee is allowed. 7. So far as the adhoc disallowance on account of vehicle running and maintenance expenses, depreciation on motorcar and adhoc disallowance on account of telephone and interest expenses are concerned, I find out of the total amount of ₹ 8,89,785/-, the A.O. disallowed 10% of the same at ₹ 88,979/- which the Ld. CIT(A) has restricted to ₹ 44,489/-. It is the submission of the Learned Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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