9911796707
TMI Blog2014 (1) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... y payment is made within the grace period. Disallowance made on account of marketing and field expenses – Held that:- All these expenses were incurred in cash - No further details of these expenses were made available unlike traveling expenses for directors and field staff where full details were maintained by assessee - CIT(A) was therefore of the view that when entire tour expenses of directors and field staff were booked under the head of traveling expenses, there was no justification for incurring these expenses - assessee could not give any cogent reason for claiming these expenses – the order of the CIT(A) upheld – Decided against Assessee. Disallowance of interest on loans and advances made for non-business purpose – Held that:- T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Finance Act 2003 deleted the second proviso and amended the first proviso to sec. 43B w.e.f. A.Y. 2004-05 and thus, impugned payments were allowable if paid before filing of return of income and necessary evidence of the payment was enclosed with the return of income. Reliance was also placed on the following grounds:- Addl. CIT vs. Vestas RRB India Ltd. 2005, 92 ITD-1 (Del) Jt. CIT vs. Devidayal (Sales;) Pvt. Ltd (2004) 3 SOT 814 (Mum) 4. Ld. CIT(A) disposed of this ground of the assessee by observing as under:- 2.2. I have considered the matter. Omission of second proviso to section 43B and amendment to the first proviso to section 43B by Finance Act, 2003 w.e.f. 1.4.2004 was in respect of employer's contribution to the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into consideration all the judicial pronouncements on the issue. Relevant concluding para of that order on this issue reads as under:- "6.5 The deducibility of the impugned payments has thus to be seen only with reference to s 36(1)(va), which has not witnessed any material changes since its insertion on the statute by finance Act, 1987 w.e f. 01/4/1988. As such, deduction would be exigible where the payment is made by the due date, i.e., under the relevant Act. In this regard we observe that the AO has not allowed the 'grace period' of five days in case of payments under the Provident Fund Act. This is as the due 'date' is defined under the said Act, which could not be superseded by any circular or notification. Secondly, the extension i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has erred in law and on facts in confirming the disallowance of Rs. 5,41,558/- as made by the Ld. AO on account of marketing and field expenses." 7. The assessing officer observed during the assessment proceedings that a new head of marketing and field expenses was created during the year. Though sales had decreased to 50 % of last year's sales, expenses were mostly in cash and debited in the accounts in the name of one S.P. Mishra on tour. As per assessing officer, what Shri SP did for marketing and boosting the sales was not known to the assessee. Assessing officer further observed that out of total sales of Rs. 1.05 croe, about 38 lacs were from sister concern namely Shrijee Farming Agency on commission basis and for remaining sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the narration of the " paid to field staff towards marketing expenses for the month of ...". All these expenses were incurred in cash. No further details of these expenses were made available unlike traveling expenses for directors and field staff where full details were maintained by assessee. Ld. CIT(A) was therefore of the view that when entire tour expenses of directors and field staff were booked under the head of traveling expenses, there was no justification for incurring these expenses. Before us also assessee could not give any cogent reason for claiming these expenses. Therefore, we are not inclined to interfere with the order passed by Ld. CIT(A) and the order passed by him is hereby upheld. This ground of the assessee is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 351/- The assessee also submitted that AO had charged interest @ 17.5 % amounting to Rs. 7,50,360/- on Rs. 43,87,765/- in list A, which included balance of Rs. 28,72000/- due from Srijee Farming Agency from which assessee has already charged interest amounting to Rs. 5,04,000/-. It was further pointed out by the assessee that though the AO duly narrated these facts in the order he has still doubly charged interest. The assessee's further submission was that it being a limited company having non-interest bearing capital and unsecured loans the disallowance was not warranted nor justified. Assessee also submitted that bank has waived very large amount of interest under OTS by a deed of composition entered on 31-12-2003 to the tune of Rs. 1,31 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
