TMI Blog2022 (2) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ade suo moto disallowance which was not considered by the lower authorities before making further disallowance - we observe that the contention of the assessee that it has already made suo motto disallowance which pertained to the expenses of the nature of speed money and the claim that the A.O had mistakenly presumed the entire administration expenditure for computing further such disallowance @ 25% as speed money is required verification on the basis of relevant supporting detail and document. Therefore, we consider it will be appropriate to restore this issue to the file of the assessing officer for deciding de novo after verification and examination of the relevant material and submission of the assessee. Therefore, this ground of appeal of the assessee is allowed for statistical purpose. Disallowance u/s 14A r.w.r. 8D - CIT(A) has restricted the disallowance computed by the assessing officer u/s 14A r.w.rule 8D to the extent of the exempt income of ₹ 10 lac earned by the assessee - HELD THAT:- During the course of the appellate proceedings before us the ld. Counsel has referred the provision of Sec. 115BBDA and contended that provision of this section was not consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at sundry expenses were incurred by the Appellant were for and on behalf of its Principals, for whom the Appellant acted as an agent. Thus, the expenses incurred were on the principal's account and were not incurred by the Appellant on its own account. 6. The Learned CIT (A} failed to appreciate that the appellant and its group concerns never spent any money which is illegal and opposed to public policy. DISALLOWANCE OF BUSINESS PROMOTION EXPENSES: 2. The Learned CIT (A) erred in confirming the ad hoc disallowance of ₹ 1,95,714/-out of business promotion expenses. 2.1 The Learned CIT (A) failed to appreciate the fact that the AO had not considered the submissions filed by the appellant during the course of assessment proceedings. The Learned AO had wrongly stated in the Assessment Order that the appellant had failed to establish business expediency and purpose of these expenses. The appellant craves leave to add, alter, amplify, modify, reframe or delete any of the aforesaid grounds at or before the hearing. 2. The fact in brief is that the assessee has filed a return of income declaring income at Rs. Nil on 30.11.2017. The case was subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at miscellaneous expenses included entertainment expenses speed money etc. On query, the assessee explained that in the course of its business it has to incur certain expenses in the form of payment to port worker, labourer as speed money for expediting the process of loading/unloading of cargo ships from ships so that both the ships and cargo were not detained at the port for a long time as it involved substantially huge expenses. The A.O has not accepted the explanation of the assessee stated that assessee had not established the business expediency and the purpose of these expenses with supporting evidences. Therefore, the A.O has disallowed 25% of these expenses on adhoc basis to the amount of ₹ 27,02,984/-. Since, the assessee had already disallowed ₹ 6,75,804/- out of administrative expenses, therefore, the A.O had added the differential amount of ₹ 20,27,280/- to the total income of the assessee. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. 5. During the course of the appellate proceedings the ld. Counsel has contended that assessing officer has mistakenly taken it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Disallowance of Business Promotion Expenses: 2. The Learned CIT (A) erred in confirming the ad hoc disallowance of ₹ 1,95,714/-out of business promotion expenses. 2.1 The Learned CIT (A) failed to appreciate the fact that the AO had not considered the submissions filed by the appellant during the course of assessment proceedings. The Learned AO had wrongly stated in the Assessment Order that the appellant had failed to establish business expediency and purpose of these expenses. The appellant craves leave to add, alter, amplify, modify, reframe or delete any of the aforesaid grounds at or before the hearing. 7. The assessee has not pressed this ground of appeal, therefore, the same has been stand dismissed. Additional Ground of appeal: The Assessing Officer and the CIT Appeal erred in disallowing the expenditure of ₹ 10,00,000/- by invoking Rule 8D of the Income Tax Rules. In fact, the exempt Income from Dividend on shares were received from Group Companies and therefore no expenditure were incurred to earn that income. 8. During the course of assessment the A.O noticed that assessee has earned dividend income of ₹ 5,91,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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