9911796707
TMI Blog2012 (11) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the ld. CIT(A) Amritsar, has erred in deleting the addition of Rs.22,97,165/- made on account of business promotion expenses without appreciating the facts that the assessee failed to produce list of the recipients to whom gifts were made, inspite of the facts that sufficient opportunities were provided. ii) On the facts and circumstances of the case, the ld. CIT(A) Amritsar, has erred in deleting the addition of Rs.11 lacs made by the Assessing Officer without appreciating the facts that the assessee could not produce any record/evidence regarding rendering of services by Misra & Misra associates. iii) On the facts and circumstances of the case, the ld. CIT(A) Amritsar, has erred in deleting both the above additions without appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee failed to lead any record/evidence under both the heads during the course of assessment proceedings. The Ld. CIT(A) has failed to appreciate that the assessee did not produce any correspondence/records regarding defating of advisory services and rendering of services by the said M/s. Mishra & Mishra Associates on account of procurement of business of the assessee. iii. Appellant craves leave to amend or add any or more grounds of appeal." 4. In ITA No.387(Asr)/2011, the Revenue has raised following grounds: "i. On the facts and circumstances of the case, the ld. CIT(A) has erred in deleting the addition of Rs.50,000/- made by the AO on account of disallowance under business promotion expenses. ii) On the facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the form of Diwali gifts and as per explanation to section 37(1), the said expenditure is prohibited by law and therefore, no deduction u/s 37(1) of the Act can be allowed. Accordingly, the AO disallowed the said expenditure. 5.1. Before the Ld. CIT(A), it was argued and submitted that the assessee had started the business in the middle of February, 2004 and assessee for the assessment year 2004-05 had declared an income of Rs.3,33,29,720/-. During the impugned year, the assesse had declared an income of Rs.29,07,28,925/-. The business progress in such a short period is appreciable and the expenditure incurred has to be considered in that background. The expenditure was incurred on Diwali distribution as submitted before the AO and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibited by law, has been brought on record by the AO and in the facts and circumstances of the case, such expenses by taking the volume of the turnover and the income declared being second year operation of the assessee's business, the expenditure incurred is reasonable. In view of the above discussions, we find no infirmity in the order of the ld. CIT(A), who has rightly deleted the addition so made. Thus, this ground of the revenue is dismissed. 7. As regards ground No.2, the brief facts are that the assessee had incurred the expenditure of Rs. 11 lacs i.e. Rs. 8 lacs by payment to M/s. Mishra & Mishra Associates and Rs. 3 lacs to Mr. Anand Somani of M/s. Balaji Sales Corpn. for legal and professional charges. The assessee has not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh etc. The said firm succeeded to get contracts in Andhra Pradesh and U.P. and because of the said, the assessee has been able to achieve huge volume of work. The payment has been made through cheque after deducting TDS. Copies of the bills have been placed on record. The Ld. CIT(A) after considering the explanation of the assessee observed that the A.O. had made the addition without bringing on record any concrete adverse material establishing the falsehood of the claim of the assessee. The expenses are duly vouched, which have been paid through cheques after deduction and depositing the tax at source. Accordingly, the ld. CIT(A) allowed the claim of the assessee. 8. We have heard the rival contentions and perused the facts of the case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts in assessee's own appeal for the assessment year 2005-06, which has been decided by us hereinabove in ITA No.314(Asr)/2011 by our order of even date. Following the same, the appeal of the Revenue in ITA No.386(Asr)/2011 is dismissed. 12. Ground Nos. 2 & 3 are general in nature and therefore, do not require any adjudication. 13. Now we take up appeal of the Revenue in ITA No.387(Asr)/2011 for the assessment year 2007-08. The facts in ground No.1 are identical to the facts in assesse's own appeal for the assessment year 2005-06 on account of disallowance of business promotion expenses. The AO has made disallowance of Rs.50,000/- out of total claim of Rs.12,80,834/-, which has been deleted by the ld. CIT(A). 14. We have heard the rival ..... X X X X Extracts X X X X X X X X Extracts X X X X
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