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TMI Blog2014 (12) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... various firms - the assessee had declared net profit in the previous AY i.e. 2006-07 against the gross receipt of ₹ 84,88,534/- being direct expenses incurred on hoardings and painting were accepted by the revenue as the net profit in that assessment year was 3.56% only - Whereas for the relevant AY 2007-08 the net profit rate was shown at 5.23% which was better than the rate accepted in the last year – assessee rightly contended that its claim of having incurred expenses towards hoarding, flex structure and paint were a necessary part of business being direct expenses, the Tribunal rejected the claim of the assessee with regard to the other disallowance – the order of the Tribunal is upheld – Decided against revenue. - ITA No. 364 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges. The income of the assessee was assessed under sub Section (1) of Section 143 of the Act on 18.3.2008 and thereafter selected for scrutiny. Accordingly, a notice dated 29.9.2008 under sub Section (2) of Section 143 was issued, which was served upon the assessee, on 30.9.2008. On 7.1.2009 a questionnaire was also served upon assessee and on the basis of the reply to the questionnaire the Assessing Officer issued a fresh notice dated 19.1.2009 under sub Section (2) of Section 143 and sub Section (1) of Section 142 of the Act. The assessee produced the books before the assessing officer to justify the claim of the expenses. The assessee filed list of 25 persons from whom various works had been done. The assessing officer in order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt was added in the assessee's total income. Against the claim of expenses being incurred on running of tempo, assessee had claimed the benefit of ₹ 1,26,282/-. However, the Assessing officer only disallowed a sum of ₹ 30,000/- out of the same and it was ordered to be added to the assessee's total income. The assessee moved an application under Section 154 of the Act before Assessing officer by pointing out that the payment made to M/s Jay Balaji Arts Publicity was to the tune of ₹ 6,58,442/- and the said expenses were disallowed twice which involved a sum of ₹ 13,16,884/- against a sum of ₹ 6,58,442/-. The contention of the assessee was accepted by the Assessing officer, accordingly, the assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be answered by this Court. In support of the question of law being proposed,the counsel for the Revenue further submitted that the order of the Assessing Officer was not only fair and just but was based upon the consideration of evidence, report of the Inspector and it found that the format of bill in respect of the charges was same, but the charges were found not to be genuine. Whereas according to Mr. Ravi Shankar, Advocate appearing on behalf of the respondent supporting the finding rendered by the Income Tax Appellate Tribunal which was passed on appreciation of the remand report and on consideration of the assessment proceedings of previous year i.e. 2006-07 and subsequent year i.e. 2008-09. He further submitted that Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipts during this period from this business of displaying of hoardings and wall painting etc.is at ₹ 1,12,27,378/-. Towards the above receipt the assesee has claimed expenses of ₹ 60,36,210/- on account of hoarding and flex structure and ₹ 21,64,392/- on account of painting totaling ₹ 82,00,602/-. The assessee has shown a gross profit rate of 26.96%, giving a net profit of ₹ 5,87,691/-. Hence, the net profit rate has been declared at 5.23%. The A. O.has disallowed an amount of ₹ 60,01,578/- and has allowed the balance amount of ₹ 21,98,024/- by treating it is genuine expenses and has thus,assessed net income at ₹ 67,91,620/- giving net profit rate of 60.49%. In our considered opinion, disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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