TMI Blog2003 (6) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosing a total income of Rs. 15,64,960 which was taken up for scrutiny. While completing the assessment, the Assessing Officer found that the assessee has debited towards the advertisement and sales promotion Rs. 69,54,507. The Assessing Officer asked the assessee to furnish necessary details and to explain as to how there was a high rise in the expenditure on account of advertisement and sales promotion in the instant year. The assessee stated before the Assessing Officer that the sales had gone up nearly about 17% in the year under consideration and such expenditure was inevitable. The controversy arises when the Assessing Officer added back Rs. 58,12,463 in respect of sales promotion and advertisement expenses, the assessee carried the matter in appeal before the CIT(A) who on the basis of the submission made before him deleted the addition made by the Assessing Officer. 5. The Ld. D.R. stated that the assessee was asked to explain the necessity of a wholesale dealer in incurring expenditure on advertisement and sales promotion as normally it is seen that for the products of cigarettes/tobacco etc. it is the manufacturer who undertakes to advertise and promote the sale of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount had been opened for the simple purpose of encashing cheques issued by the assessee to M/s. Graphic Circle. He has, therefore, reiterated that the Assessing Officer was quite justified in disallowing the expenses which, according to him, was an arrangement to inflate the expenditure. 6. The Ld. A.R. mentioned that the assessee made payment of Rs. 35,900 only to M/s. Graphic Circle but it was wrongly mentioned as Rs. 5,60,000 by the Assessing Officer and the payments made to M/s. Graphic Circle was wholly and exclusively for the purpose of business and the payments made were fully verifiable. He has therefore asserted that the Assessing Officer erred in disallowing the same by holding that the payment made was an arrangement to inflate the expenditure. He has further mentioned that the Assessing Officer relied on the Inspector's report and certain individuals alleged to have been examined by the Inspectors deputed by him in connection with the payment to M/s. Graphic Circle without handling over a copy of the Inspector's report and without producing the other parties examined by the Inspector for cross-examination by the assessee. It was further brought to the notice of the Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not do and also summons under section 131 could not be served as the party is not traceable at the address given by the assessee. He has, therefore, stated that the Assessing Officer was quite justified in disallowing the expenditure. 10. The Ld. A.R. contended that the expenses incurred on payment to M/s. Universal Printer was wholly and exclusively for the purpose of the business and the payments made were fully verifiable. It was further brought to our notice that the Assessing Officer totally relied on the Inspector's report and certain other individuals alleged to have examined by the said Inspector in connection with that payment to M/s. Universal Printers without giving copy of the Inspector's report and without producing other parties examined by the Inspector for cross-examination by the assessee. 11. We have heard both the sides and gone through the record. In this connection our observations in respect of payment made to M/s. Graphic Circle should be followed. For the sake of brevity, we are not repeating the same. 12. As regards the payment to M/s. Tara Enterprises, the Ld. D.R. mentioned that the accounts of M/s. Tara Enterprises which was also opened on the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Assessing Officer has rightly disallowed the expenses and added back the same in the total income of the assessee. 16A. The Ld. A.R. stated that the expenses incurred on payments to M/s. Fleet amounting to Rs. 1,02,538 for hiring cars was wholly and exclusively for the purpose of business and the payments were fully verified by the Assessing Officer. It was further stated that the Assessing Officer erred in disallowing the payment to M/s. Fleet merely on the ground that originally the bills were raised on the principals i.e., I.T.C. Ltd. and duty slips were signed by the I.T.C. personnel but subsequently a fresh bill was raised in the name of the assessee. In this connection we have noticed from the order of the Ld. CIT(A) that the Assessing Officer was told by the I.T.C. that the said amount was paid by H.T.C. and hence a fresh consolidated bill of the said amount was raised on H.T.C. giving bill No. June/66A and the duty slips were signed by the I.T.C. personal and not by the people from the H.T.C. In view of the above fact, we do not find any justification in interfering with the order of the Ld. CIT(A) which is, therefore, sustained on this point. 17. As regards the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Assessing Officer, it appears that he is admitting the fact that the bank account existed and the relevant cheques were encashed by the assessee. We do not therefore find any infirmity in the order of the Ld. CIT(A) which is, therefore, sustained. 23. As regards the disallowance of a sum of Rs. 27,68,607 under the head "display and sampling expenses", the Ld. D.R. mentioned that the assessee could not produce the list of shop where the assessee distributed the packets of cigarettes throughout Calcutta for displaying as well as for sampling. He has therefore supported the view taken by the Assessing Officer and stated that the Ld. CIT(A) was unjustified in reversing the order of the Assessing Officer. 24. The Ld. A.R. for the assessee contended that displaying and sampling expenses amounting to Rs. 27,68,607 was made wholly and exclusively for the purpose of business and which were fully verifiable from the recross of the assessee. He has therefore reiterated that the Assessing Officer was not justified at all in disallowing the same without allowing the assessee any opportunity to rebut the same. 25. We have heard the rival submissions and on a careful consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the company to do so'. 28. Coming to more specific observations, Assessing Officer noted that the assessee has debited a total amount of Rs. 5,60,000 as payment to one M/s. Grafic Circle of 'Kudiram Bose Road, PO Hridyapur, 24 Pargana', ostensibly for car hire charges, but inspector's spot enquiry report revealed that no such concern existed at the given address. Enquiries from the local residents and post office further revealed that there was no such concern in existence in past also. These facts are said to have been pointed out to the assessee vide order sheet entry 11th March, 1997 and also by a letter dated 12th March, 1997, but all that the assessee had to say was that "we have furnished all information to you, which was in our possession and control i.e., we submitted to you copies of bills and payment details. We would bring to your kind attention that all payments were made by account payee cheques." The Assessing Officer further made efforts to trace this M/s. Grafic Circle by tracing the bank account details, through discharged cheques of the assessee, from records of the assessee's banker. This exercise revealed that M/s. Grafic Circle was having a current a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of inflating the expenditure and, thereby reducing the tax liability. 30. The Assessing Officer further noticed that payments of Rs. 5,93,900 were made to M/s. Ma Tara Enterprises of '8 Ekdalia Road', ostensibly for the purpose of hiring persons for sales promotion drives. Again spot enquiries confirmed that no such concern existed at the given address and local enquiries revealed that no such concern was in existence at any point of time. These facts communicated to the assessee were met with assessee's response extracted in paragraph 28 above i.e., "We have furnished all information to you, which was in our possession and control i.e., we submitted to you copies of bills and payment details. We would bring to your kind attention that all payments were made by account payee cheques." The Assessing Officer further made efforts to trace this M/s. Ma Tara Enterprises by tracing the bank account details, through discharged cheques of the assessee, from records of the assessee's banker. This exercise revealed that M/s. Ma Tara Enterprises was having a current account No. 285 with Punjab National Bank, Tangra Branch, Calcutta and this account was operated by one Shri A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted through inspector, such a concern did exist till 1994. 34. It was further noticed by the Assessing Officer that the assessee claimed a deduction of Rs. 27,68,607 on account of sampling and display expenses. According to the assessee, this amount represented distribution of cigarettes to various vendors for display and as free samples. It is an admitted position that despite several requisitions by the Assessing Officer, the assessee was not in a position to even furnish the list of shops or any other register, report or even other document which could throw some light in the matter. In response to show-cause notice requiring the assessee to show cause as to why, in the absence of necessary clarifications and evidences to substantiate the claim, this expenditure of Rs. 28,68,607 should not be disallowed, the assessee, vide letter dated 18-3-1997 stated that "We would bring to your kind attention that sampling/display expenses have been genuinely incurred during the year from time to time which we have already explained to you. These cigarettes were distributed, through hawkers, sales representatives. We have, however, not maintained the records, in respect of distributi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to M/s. Fleet, was deleted by the CIT(A) on the ground that once ITC Ltd. itself has confirmed that the payment was to be made by the assessee, the Assessing Officer was not justified in deleting the same on the ground that duty slips were signed by ITC officials. 42. Regarding disallowance of Rs. 1,50,000 on account of payment made to M/s. Market Links, the CIT(A) noted that the claim of the assessee was only Rs. 1,12,500 and complete details in respect of the same were duly furnished by the assessee but the Assessing Officer, without considering. the explanations of the assessee, disallowed Rs. 1,50,000. The CIT(A) thus deleted this disallowance also. 43. The CIT(A) then moved on to disallowance of Rs. 27,68,607 under the head Display and Sampling Expenses and observed as follows: "The Assessing Officer's main grievance against the appellant is that when it had no contractual obligation from the manufacturer, it chose to spend over Rs. 28 lakhs for this expenses. The AIR argued that in the earlier year the entire expenditure under the sales promotion and advertisement expenses was allowed by the CIT(A). The AIR also cited several case laws in support of the claim. He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 993 Bill for car hire charges 4 cars daily X 20 days @ Rs. 750 per car (including fuel, driver and all maintenance) Rs. 60,000 1-6-1993 Bill for car hire charges 4 cars daily X 20 days @ Rs. 750 per car (including fuel, driver and all maintenance) Rs. 60,000 1-7-1993 Bill for car hire charges 4 cars daily X 20 days @ Rs. 750 per car (including fuel, driver and all maintenance) Rs. 60,000 31- 7 -1993 Bill for car hire charges 4 cars daily X 20 days @ Rs. 750 per car (including fuel, driver and all maintenance) Rs. 60,000 30-8-1993 Bill for car hire charges 7 cars daily X 20 days @ Rs. 750 per car (including fuel, driver and all maintenance) Rs. 1,19,000 48. All these bills are drawn up on a for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance of probabilities that none in assessee's concern has any clue about where such a major supplier, who supplied several cars for months on almost continuous basis, disappeared. If there were actually any dealings with Grafic Circle, some one in the assessee firm should have seen the place at which this supplier was conducting the business or should have at least known the telephone number on which supplier was contactable. Even this basic information could have lead to tracing the supplier, but, then, the assessee did not furnish any information at all. It fails on the test of human probabilities that the assessee picks up a 'printer, binder and general order supplier' to supply large number of cars on somewhat continuous basis from a place far way from the city but does not even keep the basic contact details of this major supplier. I find it difficult to believe that it is a mere coincidence that only for this, and similar other suppliers of doubtful existence, cheques get encashed through un-introduced bank accounts which are used only for cash withdrawals of the account payee cheques so deposited. Elaborate exercise done by the Assessing Officer shows that there is reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervations in paragraph 8 only to respectfully disassociate myself from the same. I am satisfied that the assessee was duly confronted with the inspector's report (vide Assessing Officer's letter dated 12-3-1997, copy placed at pages 24-27 of the paper book) and assessee's comments thereon, were duly considered by the Assessing Officer. As for learned colleague' observation that "If on verification, it is found that it (bank account) has been opened with proper information and introduction and the cheques were deposited in the account of Grafic Circle, then the Assessing Officer should grant relief to the assessee as per the law.", I am unable to understand what is the relief 'as per the law' in this context and I do not seen any point in sending back the matter on this point when the assessee has not even challenged revenue's finding that the account has been opened without proper introduction. I, therefore, regret my inability to subscribe to the views of the learned colleague. 51.As far as deduction for payment of Rs. 15,40,658 to M/s. Universal Printers is concerned, I find that the actual debit to the profit and loss account is only Rs. 14,99,860 details of which are as follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he printed material said to have been printed by Universal Printers, or about distribution of such material. All that the assessee has been able to produce is a bill which anyway contains a fake address - something which, in my view, is not sufficient to entitle the assessee for a claim for deduction. The bank account through which cheques are encashed is an account opened in clear violation of established banking practices. All these factors, taken together, justify Assessing Officer's conclusions regarding the claim being not sustainable. As for learned CIT(A)'s observation that "the Assessing Officer's finding that the expenses claimed in regard to M/s. Universal Printers is bogus and payment by cheques is an arrangement to inflate expenses is based on mere suspicion, conjectures and surmise" based on which the disallowance is deleted, I may mention that, in my considered view, Assessing Officer's conclusions are based on specific and cogent reasons placed on record and which, for the reasoning I have given, I approve. My observations in paragraph 49 above also, broadly speaking, are relevant on this issue as well. In my view, mere payment through the banking channels per se can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct or corroborative that these so called promoters or 'hired boys' were made available to the assessee. I have noted that in some cases as many as 92 boys were made available to the assessee company but these persons would obviously require some kind of control of co-ordination. The assessee has not given any satisfactory details about this aspect of the matter, nor about precise nature of work done by these boys. In fact, there is no evidence at all, save and except for copy of bill on record, that services of these sales promoters was actually made available, that these sales promoters actually rendered any services at all, and that the organisation which claims to have supplied these personnel actually existed. I find it difficult to believe that none in the assessee concern has any clue about where this agency, which catered to such a large requirement of manpower, has vanished. The assessee does not even have the basic contact details of this concern. I find it difficult to believe that it is a mere coincidence that only for this, and similar other suppliers of doubtful existence, cheques get encashed through un-introduced bank accounts which are used only for cash withdrawals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s having been distributed, and that the claim is made purely on the basis of self made vouchers. In these circumstances, and in the absence of reasonable evidence about the factum of such samples having actually been distributed, the claim of the assessee has been rightly rejected by the Assessing Officer. As for learned CIT(A)'s observations about scope of section 37(1), these observations are not really germane to the context because, as I have stated above, the question of principles governing admissibility of an expense would only come to play when the factum of expense having actually been incurred is established. The assessee's case fails on this preliminary ground itself. As for inspector's report, it may have been one of the factors persuading Assessing Officer to resort to disallowance but it was certainly not the proximate factor and even without that report, disallowance was fully justified. Accordingly, I am not inclined to go into that aspect of the matter. I have taken particular note of the fact that the assessee accepts that he is not in a position to give any specific details in support of the expenditure having been actually incurred and assessee's submissions, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer with a direction to decide the matter de novo or whether the Tribunal should have restored the disallowances deleted by the CIT(A):-- Payment to Ma Tara Enterprises for supply of temporary workers Rs. 5,93,000 Sampling and Display Expenses for distribution of free cigarette samples Rs. 27,68,607 THIRD MEMBER ORDER Per Shri M.A. Bakshi, Vice-President.-- The appeal of the Revenue for the assessment year 1994-95 was heard by "C" Bench of the Tribunal. As a result of difference of opinion amongst the Members, the Hon'ble President has nominated me as Third Member in respect of the following points of difference:-- 1. Whether on the facts and in the circumstances of the case, the Tribunal should have restored the matter regarding disallowances of following expenditure to the file of the Assessing Officer with a direction to find out whether the bank account of the recipient was opened with proper direction and, if, so, allow the relief as per the law, and to decide the matter de novo after confronting the assessee with the inspector's report, or whether the Tribunal should have restored the disallowances deleted by the CIT(A):-- Payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of expense incurred through M/s. Fleet Rs. 1,02,538 (e) On account of expense incurred through Market Links Rs. 1,50,000 (f On account of expense incurred through Reach Advertisings Marketing Rs. 86,760 (g) On account of expense incurred through sampling display Rs. 27,68,607 (h) On account of expense incurred through donation Rs. 60,353 4. The Assessing Officer found that a sum of Rs. 5,60,000 was claimed to have been paid to one M/s. Grafic Circle of Kudiram Bose Road, PO Hridyapur, 24-Parganas purportedly as car hire charges. The Assessing Officer had deputed the Inspector to verify the genuineness of the payment. The enquiry conducted by the Inspector revealed that no such concern existed at the given address. On further enquiry from local residents and Post Office, it was found that no such concern ever existed at the given address. The assessee was informed about this information collected by the Assessing Officer. The assessee, however, did not produce any satisfactory explanation or further evidence in support of the claim. The Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), the expenditure claimed by the assessee is allowable in view of provisions of section 37(1) of the Income-tax Act, 1961. 8. The Revenue appealed to the Tribunal. The Ld. Judicial Member proposed an order by virtue of which the additions of Rs. 1,02,538 on account of expenses incurred on payments to M/s. Fleet for hiring cars, Rs. 86,760 on account of expenditure incurred on advertisement through M/s. Reach Advertising Marketing Co. Ltd. and Rs. 1,50,000 on account of expenses incurred through M/s. Market Links were held to have rightly been deleted by the CIT(A). In regard to the addition of Rs. 3,59,000 out of Rs. 5,60,000 on account of car hire charges to M/s. Grafic Circle and Rs. 14,99,860 on account of payment to M/s. Universal Printers for printing works, the Ld. Judicial Member restored the issue to the file of the Assessing Officer with a direction to find out whether the bank account of the parties was opened with proper direction and if so, allow the relief as per law and to decide the matter de novo after giving the assessee the copy of inspector's report. The additions of Rs. 5,93,900 on account of payment to M/s. Ma Tara Enterprises purportedly for supply of te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer has made thorough enquiry and as a result of the enquiry and scrutiny, he came to the conclusion that the amounts of expenditure aggregating to Rs. 58,72,816 was bogus. Out of total claim of Rs. 69,54,507, the Assessing Officer had allowed a deduction of Rs. 10,81,691. As a result of unanimity of opinion between the Ld. Members of the Division Bench, the assessee will get a further relief of Rs. 3,39,298. Thus the claim to the extent of Rs. 14,20,989 stands allowed. This is more or less equivalent to the claim of the assessee for assessment year 1993-94. 12. Now the question for consideration is as to whether the facts and circumstances of the case justify the additions of Rs. 3,59,000, Rs. 14,99,860, Rs. 5,93,900 and Rs. 27,68,607 to be re-examined in the light of the directions of the Ld. Judicial Member or the additions deserve to be restored, as suggested by the Ld. Accountant Member for want of supportive evidence. 13. I have given my careful considerations to the rival contentions and the material on record including the orders of the learned Members of the Division Bench. In order to appreciate the controversy, it would be relevant to consider the scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the enquiry conducted by the Assessing Officer through his Inspector were brought to the notice of the assessee. The assessee did nothing to substantiate the genuineness of the claim made under the head "sales promotion expenses". It is in the light of these facts I am required to consider as to whether the assessee had discharged the burden to support the claim of sales promotion expenses and whether Assessing Officer was duty bound to furnish copy of the report of the Inspector to the assessee and if so whether the issue requires reconsideration at the level of the Assessing Officer. It would, therefore, be necessary to consider the enquiry made by the Assessing Officer in regard to the four items of expenditure referred to above. 15. I first take up the claim in regard to the payment for car hire charges made to M/s. Grafic Circle of Rs. 3,59,000. In respect of the expenditure on account of car hire charges there was a credit of Rs. 5,60,000 to M/s. Grafic Circle reflected in the books of account. However, the actual debit to the P/L Account for the relevant assessment year was only for Rs. 3,59,000. The assessee had furnished bills purportedly issued by M/s. Grafic Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been confronted with the results of the enquiry and the assessee having expressed their inability to produce any further evidence in support of the claim, the only consequence in my view that would follow is the disallowance of the claim. As already pointed out, the burden to establish that the expenditure has genuinely been incurred is upon the assessee. By producing prima facie evidence by way of bills and the payment by payees account cheques, the burden shifted to the Assessing Officer. In turn the Assessing Officer made enquiries and on the basis of the enquiry it was found that no such concern existed. The concern was not found to exist at the given address. The opening of the bank account with PNB was also shrouded in mystery insofar as nobody has introduced the party in contravention of the banking rules and that the cheques had been deposited and withdrawals made immediately thereafter. The bank account had also been closed within a short period of time. The material collected by the Assessing Officer was sufficient to cloud the authenticity of the bills produced by the assessee in support of the claim. In the light of above facts, we as appellate authority are required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal owner of the bank account. It was sufficient for the Assessing Officer to verify whether the account in the name of M/s. Grafic Circle was genuine. Since the assessee had dealings with the payee, it would not have been difficult for them to produce evidence to establish the existence of the party and rendering of services for which the payment was claimed to have been made. The decision of the CIT(A) that the payment having been made by payees account cheques was sufficient for allowance of the claim is contrary to the decision of the Calcutta High Court in the case of CIT v. Precision Finance (P.) Ltd. [1994] 208 ITR 465 where the issue related to cash credits and the burden of proof was to be discharged by the assessee. Their Lordships of the Calcutta High Court held that mere furnishing of the particulars is not enough and mere payment by account payee cheque is not sacrosanct nor can it make a non-genuine transaction genuine. In the light of the decision of the jurisdictional High Court in regard to the weightage to be given in respect of account payee cheques in the matter of evaluating the evidence, the decision of the CIT(A) in deleting the addition was unwarranted and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made by account payee cheques is contrary to the decision of the Calcutta High Court in the case of Precision Finance (P.) Ltd. and thus the disallowance made by the Assessing Officer of Rs. 14,99,860 requires to be restored. There is no justification for remanding the issue to the file of the Assessing Officer for the purpose of providing a copy of the report of the Inspector to the assessee and also tracing of the real owner of the bank account. In my considered view, the non-furnishing of the report of the Inspector to the assessee in the absence of any demand by the assessee in this regard is of no consequence. It is well settled principle of law that the Assessing Officer is empowered to gather evidence from third parties and the requirement of principles of natural justice is that the party is confronted with the material which is collected from third parties. It is not necessary for the Assessing Officer to disclose the source of the material. The source through which the material evidence has been collected is also not required to be disclosed to the assessee. In the light of this well-settled principle of law, there is no justification for remanding the matter to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee does not know whereabouts of the agency which is supposed to arrange the supply of man power. The assessee does not have any basic contract details of this concern. There was no evidence to establish that any man power was actually supplied by M/s. Ma Tara Enterprises. There are no phone Nos. mentioned on the bills purported to have been issued by M/s. Ma Tara Enterprises. Even commercial expediency has not been established. It is strange co-incidence that the bank account in this case also has been opened without any introduction by any known person. In the light of lack of evidence in support of the claim, the CIT(A) was not justified in allowing relief to the assessee merely because the payment made to the party is by means of account payee cheques. The decision of the CIT(A) is contrary to the decision of the jurisdictional High Court in the case of Precision Finance (P.) Ltd. and since sufficient opportunity of being heard was given to the assessee for substantiating the claim, there is no justification for remanding the matter to the file of the Assessing Officer for the purpose of fresh decision in accordance with law. The assessee at no stage claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial expediency. As rightly held by the Ld. Accountant Member, the consideration of commercial expediency will arise only when the expenditure is established to have been incurred. The assessee has failed to furnish necessary evidence to support the claim that the expenditure to the tune of Rs. 27,68,607 was incurred. The foundation for the claim to be on account of commercial expediency would be the incurring of the expenditure. The Assessing Officer has disallowed the claim on the ground of the same not having been supported by any evidence. Whether the expenditure has been incurred for the purposes of business or not in the light of the finding of the Assessing Officer that such a claim is a bogus claim, is of no relevance. As far as the Inspector's report is concerned, contents of the report are immaterial insofar as the result of the enquiry has been duly communicated to the assessee. In the absence of necessary details, evidence and the results of an independent enquiry made by the Assessing Officer, there is no justification for the addition. Accordingly, the assessee having failed to discharge the onus, the Assessing Officer was justified in making the addition. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer was justified in holding that the assessee has failed to support the claim. The various important factors as discussed by me in this order may thus be summed up as under;-- (i) That the assessee had no obligation from the manufacturer to incur any expenditure on account of sales promotion expenses. (ii) That the expenditure under the head 'sales promotion expenses' for assessment year 1992-93 was Rs. 2,03,507 and for assessment year 1993-94 Rs. 14,19,127. As against that, there was unusual spurt in expenditure under this head in the year under appeal to Rs. 69,54,507. (iii) That all the four parties were not found to exist at the given address. (iv) That bank accounts in respect of all the four parties were found to have been opened without introduction of any known person. (v) That the deposits of account payee cheques were followed with immediate withdrawals from the bank accounts in respect of the all the four parties. (vi) That no telephone numbers/sales-tax registration No. or other details are available in the bills issued by the parties. (vii) That the assessee does not know the whereabouts of these parties. (viii) That the assessee does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk Rs. 14,99,960 2. Whether, on the facts and in the circumstances of the case, the Tribunal should have resorted the matter regarding disallowances of following expenditure to the file of the Assessing Officer with a direction to decide the matter de novo or whether the Tribunal should have restored the disallowances deleted by the CIT(A):-- Payment to Ma Tara Enterprises for supply of temporary workers Rs. 5,93,000 Sampling and Display Expenses for distribution of free cigarette samples Rs. 27,68,607 2. The Hon'ble Third Member adjudicated the issue arising out of the question for consideration as to whether the facts and circumstances of the case justify the additions of Rs. 3,59,000; Rs. 14,99,860; Rs. 5,93,900 and Rs. 27,68,607 to be re-examined in the light of the direction of the ld. Judicial Member or the additions deserve to be sustained restoring the view taken by the Assessing Officer as opined by ld. Accountant Member for want of supporting evidence. 3. After considering the issue thread-bare, the Hon'ble Third Member came to the view that the Assessing Officer was justified in disallowing the claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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