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TMI Blog2013 (11) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... such huge ad hoc disallowance - Decided against Revenue. - ITA No.4329/Mum/2010 - - - Dated:- 30-4-2013 - Rajendra Singh And Vivek Varma, JJ. For the Appellant : Shri Haridas Bhat For the Respondent : Shri Shekhar L Gajbhiye ORDER:- Per: Rajendra Singh: This appeal by the revenue is directed against the order dated 30the march 2010 of CIT(A) for the assessment year 2007-08. The disputes raised by the revenue in this appeal relate to treatment of advances as sale, disallowance of cash expenses and disallowance of other expenses for want of propre bills and voucers. 2. We first take up the dispute relating to treatment of advances as sales by AO. The facts in brief are that the assessee who was engaged in the business of out door advertising (mainly hoarding) had shown a sum of Rs.36,04,904/- as advance. The Assessing Officer found that the said figure was included in the list of creditors. The assessee submitted that it was only advance received and the sale bill had been raised in the next year in which it was declared as income. The AO, however, observed that payment had been received this year and, therefore, this has to be treated as part of income and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the display had been actually executed. Learned DR on the other hand supported the order of AO and placed reliance on the findings given in the assessment order. 3.1 We have perused the records and considered the matter carefully the dispute is regarding treatment of advances received by the assessee. The assessee is engaged in the business of outdoor advertising, mainly by way of hoarding. The assessee received advances in connection with booking of sites etc, and income was declared only on execution of the hoarding display. The assessee was continuously following this method. In our view, income accrues to the assessee only when the task is executed i.e. display of advertisements on the hoardings. The advances received from the parties in connection with the advertisement could not be considered as sale. The AO had added the amount primarily on the ground that advances were declared as part of creditors and in case these were removed the assets were to be more than the liability side by that amount and accordingly, he added the same to the total income. The approach adopted by the Assessing Officer is not correct because even the advances received from the parties have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee in relation to said bill. As regards, the bills of Rs.9,166/- and Rs.4,680/-, CIT (A) observed that the assessee had no produced any evidence for justification of claim and, therefore, he confirmed the disallowance in respect of the above two bills. As regards, the cash payments of 3,35,000/-, CIT (A) held that 20% of the same i.e. Rs.67,000/- has to be added to the total income u/s 40 A (3) of the IT Act. Aggrieved by the decision of CIT (A) the assessee is in appeal before Tribunal. 5. We have heard both the parties, perused the records and considered matter carefully. The AO had disallowed cash expenses of Rs.3,35,000 exceeding Rs. 20,000/- in each case as unaccounted which is not correct as the payments had been noted only on the basis of bills which were accounted. However, the cash expenses have to be disallowed at the rate of 20% u/s 40A (3) which has been done by CIT (A) and, therefore, the order of CIT (A) on this ground is upheld. 5.1 As regards the deletion of Rs. 1,23,074/- being the bill dated5.03.2006 in relation to Digital Print, we find that though the date of the bill related to the previous year, the material had been used for banner printing fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness was not in doubt. But, since the assessee had not produced all the bills and vouchers to substantiate the claim CIT (A) confirmed the disallowance of the expenditure @ 10% of the commission at Rs. 3,48,240/-. 6.2 In relation to Digital Print expenses of 7,01,121, CIT (A) noted that the sum of Rs. 1,23,074/- had been paid by account payee cheque to Digital Print. Therefore, he confirmed 10% of the balance expenditure after excluding the above expenditure i.e. Rs. 57,805/-. In relation to repairs and maintenance expenditure of Rs. 16,68,134/-, CIT (A) confirmed the disallowance to the extent of 10% i.e. Rs.1,66,813/-. In relation to site expenses of Rs.53,29,784/-, the AO had made estimated disallowance of Rs.10,00,000/-. The assessee submitted that it was in the business of display of hoardings which was allocated at various sites across India and there were also five hoardings of mobile vans fitted with Hydraulic mounting and generator set. All these required proper supervision for which specialized persons have to be present at various sites. Therefore, expenses were reasonable considering the total turnover of Rs.9.68 crore and 200 sites including the mobile sites. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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