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2023 (10) TMI 1030 - ITAT DELHIAddition on account of reversing amount - assessee has reversed bills on account of uncertainty of receiving of sale proceeds - HELD THAT:- There is no relevance and compulsion on the assessee to put any effort for recovery of the debt post amendment under the relevant provisions of the Act after 01.04.1989. All that is required is to actually write off the debt in the books of account and show that the same was considered in the income of the earlier years. As the assessee has fulfilled both the conditions, therefore, the ratio laid down in the case of TRF Limited [2010 (2) TMI 211 - SUPREME COURT] squarely applies. No interference is called for in the findings of the ld. CIT(A). Ground No. 1 of the Revenue is, accordingly, dismissed. Addition on account of additional Sales Tax - HELD THAT:- We find that the additional tax was paid as liability by the assessee for additional tax payment raised by the Sales Tax Department, which was discharged during the year under consideration. Since the deletion of the addition is after verification of evidences by the ld. CIT(A), we do not find any error or infirmity in the findings of the ld. CIT(A). Expenses towards business promotion - AO observed that these expenses were claimed to be paid through credit cards of the Directors thus element of personal expenses cannot be ruled out - CIT(A) Restricted the disallowance to 20% - HELD THAT:- Since the assessee is a limited company, there cannot be any personal element in the expenses claimed by it. If the AO is of the opinion that certain expenses may have the color of personal expenses/benefits extended to the directors of the company, then the same should be treated as perquisites in the hands of the directors but the expenses cannot be disallowed as having personal element in it. Secondly, it is difficult to ascertain which vouchers or bills pertained to personal expenses and which pertained to business promotion, as the directors of the company were entertaining customers during the Common Wealth Games. We do not find any merit in the disallowance made by the AO and restriction done by the ld. CIT(A) on the given facts. AO is directed to delete the entire addition. Additional professional charges - CIT(A) deleted the addition as found that the said party provided services of electrical engineers, draughtsman - HELD THAT:- If the AO had any doubt in his mind, he could have very well brought on record some adverse material by conducting enquiry u/s 133(6) of the Act. In the absence of any adverse material brought on record, we decline to interfere with the findings of the ld. CIT(A). Unexplained purchases - CIT(A) deleted the addition - HELD THAT:- It is an undisputed fact that the entire Common Wealth Games was surrounded by controversy/complaints and legal actions. A careful reading of the ld. CIT(A) shows that the ld. CIT(A) has factually verified the evidences in respect of each and every party and after verification of the evidences, the ld. CIT(A) has deleted the addition. Before us, the ld. DR could not point out any factual error in the findings of the ld. CIT(A) and since the ld. CIT(A) has deleted the addition on appreciation of evidences, we do not find it necessary to interfere with the findings of the ld. CIT(A). Scrap sales of carpet and fence - AO was of the opinion that scrap value of the item must have been 30% to 40% approx of the purchase price and, accordingly, estimated the scrap value and made the addition - HELD THAT:- It is true that the scrap value of the impugned items have been shown on lower side, but it is equally true that what happened during the construction of the Common Wealth Village and Sports Complex, the Government agencies were after the Organizing Committee and the participating contractors to which included CBI enquiry and other judicial enquiries. We are of the considered view that considering the distress sales surrounded by controversies, it is possible that the carpets must have been sold at throw-away prices. Considering the nature of event, we are inclined to accept the version of the ld. counsel for the assessee. The Assessing Officer is directed to delete the addition on account of scarp sales of carpets. Scrap sales of fence - No logic in the addition made by the Assessing Officer. The assessee itself has shown scrap value at Rs. 1,03,35,511/- deducting the estimated sales value of Rs. 73,27,511/-. We do not find any sense in making the addition of the balance amount of Rs. 62,79,183/- when the assessee itself has shown scrap value at Rs. 1,03,35,511/-.
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