2023 (8) TMI 626 - AT - Income Tax

Disallowance of expenditure of sales commission - genuineness of expenditure of sales commission has not been found to be established by the assessee, the same was added to the total income of the assessee, confirmed by FAA - HELD THAT - As assessee has filed a fabricated agreement during the course of appellate proceeding in order to justify the claim made by him, as the agreement was stated to be executed on 01.04.2011 but the date mentioned in such agreement was 01.04.2010. Nonetheless except for this agreement, the assessee not produced any invoice or voucher of the sales commission neither furnished quantitative details or details of sales of which commission had been computed and paid. In that view of the matter, we find no ambiguity in such order passed by the CIT(A), particularly, in the absence of any assistance made by the assessee before us. The order passed by the authorities below is found to be just and proper so as to warrant interference. The same is, therefore, upheld. The assessee s this ground of appeal fails. Travelling expenses - personal expenses or business expenses - Director who travelled to UK for exploring new market opportunity for their products in UK as the case made out by the assessee was not found to be acceptable as the assessee failed to substantiate that she explored the new market or efforts done by her to that effect - HELD THAT - Even, before the First Appellate Authority, the assessee failed to furnish any evidence to establish that such expenditure had been incurred wholly and exclusively for the purpose of its business save and accept providing invoices and vouchers for tickets. Finally, the addition was, therefore, upheld by the Ld. CIT(A). We consider the reason assigned by the authorities below in the absence of any fresh evidence produced by the assessee before us or any argument advanced by the assessee or any assistance rendered by the assessee, just and proper without any ambiguity. The same is, therefore, upheld. This ground of appeal is, thus, dismissed. Sales promotion expenses - HELD THAT - As addition was made and further upheld by the Ld. CIT(A) in the absence of any assistance rendered by the assessee before us, we find no ambiguity in addition made by the authorities below, the same is, therefore, upheld. The ground of appeal is, thus, dismissed. Other expenses claiming as debited in P L account - HELD THAT - We find no ambiguity in such addition upheld by the Ld. CIT(A), particularly, in the absence of any assistance rendered by the assessee before us, this ground of appeal, therefore, found to be devoid of any merit and thus, dismissed. Assessee appeal dismissed.

Summary

Issues Involved:
1. Disallowance of Sales Commission
2. Disallowance of Travelling Expenses
3. Disallowance of Sales Promotion Expenses
4. Disallowance of Other Expenses

Summary:

1. Disallowance of Sales Commission:
The assessee's appeal against the addition of Rs. 4,70,711/- as sales commission was dismissed. The assessee failed to substantiate the genuineness of the sales commission expenditure. The agreement provided was found to be fabricated, and no invoices or vouchers were produced. The Tribunal upheld the disallowance due to the lack of credible evidence and the fabricated agreement.

2. Disallowance of Travelling Expenses:
The addition of Rs. 1,53,133/- for travelling expenses was upheld. The expenses were claimed for Mrs. Rekha Nitin Parekh, a Director, for a trip to the UK. The assessee failed to provide evidence that the travel was for business purposes. The Tribunal found the disallowance justified as no substantial proof was provided to support the business nature of the travel.

3. Disallowance of Sales Promotion Expenses:
The addition of Rs. 2,89,095/- for sales promotion expenses was upheld. The expenses were claimed for jewellery gifted to customers, which was deemed personal rather than business-related. The assessee failed to respond to the show cause notice and did not provide any assistance or evidence before the Tribunal. The disallowance was found to be proper.

4. Disallowance of Other Expenses:
The addition of Rs. 6,97,661/- for other expenses was largely upheld, except for Rs. 76,925/-. The assessee claimed damage charges and other expenses related to international transactions. However, the invoices lacked necessary details such as stamps, seals, and inward marks, making them appear bogus. The Tribunal upheld the disallowance due to the lack of proper evidence and relevant details, except for the amount substantiated by M/s. Dotson Global Ink.

Conclusion:
The Tribunal dismissed the assessee's appeal in its entirety, finding no merit in the grounds raised. The disallowances made by the lower authorities were upheld due to the lack of credible evidence and the fabricated documents provided by the assessee.