9911796707
TMI Blog2015 (5) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... partial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us and has raised the following grounds;- 1. Ld. CIT (A) grossly erred in law and on facts in confirming disallowance of Rs. 2, 97, 284/- made by AO out of deferred revenue expenses claimed by the appellant. Both the lower authorities have erred in not appreciating the contention of the appellant that the modification expenses that is neither capital or personal was amortized and spread over the period of 5 years as per matching principle of revenue / expense. Ld. CIT (A) ought to have allowed the claim by quashing the order of AO. 2. Ld. CIT (A) grossly erred in law and on facts in confirming disallowance of Rs. 1, 90, 622/- made by AO of gift and presentation expenses ignoring the submissions of the appellant that the expenses were laid out of commercial expediency in the ordinary course of business. Ld. CIT (A) ought to have deleted such disallowance of legitimate expenses. 3. Ld. CIT (A) erred in law and on facts in confirming addition made of membership fees of Rs. 29,925/- as well adhoc disallowance of 10% out of miscellaneous expenses by AO without appreciatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A). She further placed reliance on the decision of Hon'ble Apex Court in the case of Madras Industrial Investment Corporation Ltd. vs. CIT (1997) 225 ITR 802. She therefore submitted that the claim of the Assessee be allowed. The ld. D.R. on the other hand submitted that Assessee has not brought on record any material on record to support its contention of matching the revenues with the expenses incurred nor submitted the details of the expenses. She thus supported the order of A.O and ld. CIT(A). 7. We have heard the rival submissions and perused the material on record. We find that ld. CIT(A) while upholding the action of A.O has noted that no details to support the contention of the Assessee were filed before him or before ld. CIT(A) and therefore the ratio of the decision of Hon'ble Apex Court in the case of Madras Industrial Investment Corporation (supra) could not apply to the facts of the Assessee. Before us, also Assessee has not placed any material on record to support its contention of it satisfying the principle of "matching concept" nor could controvert the observations by ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the paper book , we find that it is a copy of the ledger account of Gift and Presentation articles. On perusing the ledger account it is seen that the amount mainly paid to Mr. N. Gopinath for the purpose of gift. Apart from the narration of the entry, no details as called for by the A.O has been placed before us. However, considering that the Assessee is a public Ltd. Co. and considering the nature of the business of the Assessee and considering the totality of facts,we are of the view that the disallowance if made at 10% of the expenditure would meet the ends of justice as against 20% made by the A.O. We thus direct accordingly. In the result, this ground of Assessee is partly allowed. 3rd ground is with respect to adhoc disallowance. 12. On perusing the details of miscellaneous expenses, A.O noticed that Assessee has incurred Rs. 74,420/- on account of advertisement and publicity expenses and from the details he noticed that the entire expenditure except Rs. 2,920/- was in the nature of donation and was not for advertisement and publicity. He accordingly disallowed Rs. 71,500/- He also noticed that Assessee has claimed 29,925/- towards membership and subscription expenses of Am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses are in the nature of payment to union leader, incidental expenses during factory inspector's inspection etc. which are prima facie not allowable. Hence the A.O's action of adding of Rs. 1,01,451/- is upheld. 13. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us. 14. Before us ld. A.R. reiterated the submissions made before A.O and ld. CIT(A). She further submitted that the Managing Director was required to travel to various places in connection with the business of the Assessee and was required to incur expenses for the purpose of the business of the Assessee and in such circumstances, the membership fees for American Express Credit Card was for the purpose of business. With respect to other expenses it was submitted that the expenses have been incurred for the purpose of business and therefore the same is allowable. The ld. D.R. on the other hand supported the order of A.O and ld. CIT(A). 15. We have heard the rival submissions and perused the material on record. We find that the expenses in relation to the membership fees of American Express Credit Card was disallowed in the absence of the details. With respect to the adhoc disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents effect TDS on payments relating to mobilization advances as also the periodic invoices, there occurs a mismatch in a particular year when compared to income/ amount reflected in the TDS certificates and that accounted for as income in the profit and loss account. Because of this reason, as per TDS certificates the receipts aggregated to Rs. 2,63,33,280/- whereas as per amount credited in the profit and loss account it is Rs. 25,66,87,207 leading to the difference of Rs. 66,93,121/-, This temporary difference automatically gets sorted out over a period of time when a particular contract is fully executed and accounts are duly adjusted and settled between the parties. Since the appellant had offered for taxation a higher amount of income viz a viz that reflected in the TDS certificates and as adjusted for the mobilization advances included, therein, hence , there appears to be no reason for the AO to make the addition of Rs. 66,93,121/- on account of suppression of contract receipts. In view of the above factual position, the appellant requested that A.O be directed to delete the addition. 12.2 I have gone through the facts of the case, as also the observation of the AO and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 28.03.2015. She therefore submitted that the addition which has been made by the Assessee be deleted. In the alternate, she submitted that Assessee be granted one more opportunity so that Assessee can reconcile the difference before the lower authorities. The ld. D.R. on the other hand supported the order of A.O and ld. CIT(A). 19. We have heard the rival submissions and perused the material on record. In the present case, the addition between the contract receipts shown as per the TDS certificate and the amount credited by the Assessee in its Profit and Loss account was considered as income of the A.O. A.O had noted that the Assessee could not reconcile the difference between the TDS certificates and the Profit and Loss account. We also find that ld. CIT(A) has also noted that Assessee could not reconcile the difference either before A.O or before him. Before us, ld. A.R. has submitted that the difference was on account of mobilization advance which has been offered to tax in subsequent years and it was further submitted that if the Assessee is granted one more opportunity it would be in a position to reconcile the difference. The ld. A.R. further submitted that aforesaid met ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
