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TMI Blog2025 (5) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... resident corporate entity is an authorized wholesaler of Samsung mobile phones and accessories. The business activity of the assessee involves sales of mobile phones and accessories to dealers and distributors. For the assessment year under dispute, the assessee filed its return of income on 28.09.2012, declaring total income of Rs. 80,35,369/-. In course of assessment proceeding, the Assessing Officer (AO) noticed that the assessee had debited an amount of Rs. 1,09,79,713/- towards business promotion expenses. When called upon to justify the claim, the assessee furnished its reply with sample bills and ledger copy. Alleging that the assessee had not furnished all the bills to verify the expenses and the assessee also failed to justify inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, the assessee could know that the A.O. had made an adhoc disallowance, alleging non furnishing of complete bills and invoices. Therefore, the assessee furnished the complete set of bills and invoices before the first appellate authority. He submitted, after verification the A.O. has accepted the transactions. Therefore, merely because complete set of bills/invoices were not furnished at the time of assessment proceeding, the amount of Rs. 1,25,852/- should not be disallowed. 6. The learned Departmental Representative ('ld. DR' for short) relied upon the observations of the A.O. and first appellate authority. 7. We have considered rival submissions and perused the materials available on record. Facts on record reveal that in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admissibility of the evidences submitted by the assessee may be decided considering the facts & circumstances of the case as well as on merits of the case. 8. The aforesaid observations of the A.O. leaves no room for doubt that there is no dispute about the genuineness of the expenses claimed by the assessee. Merely because complete set of bills and vouchers were not produced before the A.O, in course of the assessment proceeding, an amount of Rs. 1,25,852/- should not have been disallowed. More so, keeping in view the fact that the business promotion expenses incurred by the assessee is very much reasonable, keeping in view the total sales turnover during the year of Rs. 207,59,88,374/- and also the fact that this is the first year of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r address. However, confirmation from the said part was submitted before the A.O. during remand. It was submitted that one of the parties has closed down the business, hence, could not be found. However, the assessee submitted the ledger and sales invoice of the party. The submissions made and additional evidences furnished by the assessee were forwarded to the A.O. After verifying the evidences furnished by the assessee, the A.O. accepted that the transactions are verifiable. However, he observed that in absence of entire details, the claim of expenses could not be allowed. The A.O. further observed that while completing the assessment, the A.O. should have made the disallowance u/s. 37(1) of the Act. Based on the observations made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company in its submission mainly contended that sales were made to various parties and there were 1100 such sales transaction entered into by the assessee company with the parties. It was submitted that discount to these parties were offered on the basis of business transaction entered into by the assessee company with these parties. The AO however, in the course of assessment proceeding had issued letter u/s 133(6) of the IT Act, 1961 calling confirmation of transaction entered into by the assessee company to only 10 parties. Out of these 10 parties only 6 parties confirm the transactions. The other parties who have not responded namely were (i) Mahavir Connection & (ii) Modern Telecom, but during the year under consideration no sales wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e details the claim of expense made by the assessee company under this head is not fully found verifiable. It is further submitted that under this head the then AO ought to have made disallowance u/s 37(1) of the IT Act, 1961. However, the then AO made the disallowance u/s 69C of the IT Act, 1961. It is therefore, requested that while deciding this issue the AO may please be directed to make addition as per the provision of section 37(1) of the IT Act, 1961. This issue may therefore please be decided considering the facts and circumstances of the case and on merit of the 14. From the observations of the A.O. in the remand report, the following facts clearly emanates: (i) Though the assessee had made sales to more than 1000 parties, h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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