9911796707
TMI Blog2012 (9) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in allowing advance irrecoverable written off of Rs.4.34 lakhs as the assessee had abstained from furnishing documents which could establish the nature of business as relatable to business and that the expenditure was incurred during the year, the expense in therefore not allowable u/s. 37 of the I.T. Act, 1961." 2. Relevant facts are that the assessee is engaged in the business of manufacturing and selling of leather garments. It has factories at Okhala, Industrial area New Delhi for manufacturing leather garments. It has also an LPG bottling plant in Agra. The assessment order u/s 143(3) dated 30th Dec. 2005 was set aside u/s 263 of the Act by the Ld. Commissioner of Income Tax vide his order dated 29.3.2007 directing the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.50/- towards quality control expenses incurred for inspection of quality of the products; and Rs.9,48,711.35/- towards cost of materials utilized for developing of samples and models for foreign buyers. The AO disallowed the claimed expenses of Rs.16,28,019.95/- on the basis that samples and models for foreign buyers were sent by Ramnath International and not by the assessee. The Ld. CIT (A) has deleted the disallowance of expenses of Rs.16.28 lacs on the basis that these expenses are necessary for obtaining the export orders. He further noted that these expenses have been incurred throughout the year. The samples to the prospective buyers abroad were sent through M/s Ramnath International who in turn procure export orders for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was in the manufacturing and selling of leather garments. For making models and samples thereof certain cost were incurred for leather, other raw materials labour charges etc. The contention of the assessee remained that these samples and models were sent to the prospective buyers abroad through M/s Ramnath International who in turn procure export orders for the assessee company. The assessee had also produced the details of foreign buyers to whom these samples and models were sent. Keeping all these material facts in mind we are of the view that the Ld. CIT(A) has rightly deleted the disallowance of the claimed expenditure of Rs.16,28,020/- in relation to selling and distribution. The same is upheld. The ground no. 1 is accordingly re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
