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TMI Blog2015 (6) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. The Hon’ble High Court observed that case of Haji Aziz and Abdul Shakoor Brothers Vs. CIT, [1960 (11) TMI 15 - SUPREME Court] has held that any amount paid, which was in the nature of penalty for breach of law, was not allowable as deduction while computing the income of the assessee, as the payment was not to compensate the loss on account of delay in making the payment, but was on account of penalty for breach of law. No material has been brought on record to show that the said amount was paid by the assessee by way of compensation for delay in making the payment of sales-tax. - Decided against assesse. Disallowance of export promotion and sales promotion expenses - Held that:- We find that the apart from making a general submission that the turnover of the assessee has increased, no specific error in the order of the CIT(A) could be pointed out by the AR. The purpose of visit and the business connection of the above expenditure could not be established by the assessee by producing relevant material. In the absence of the same, we do not find any good reason to interfere with the order of the CIT(A), which is confirmed - Decided against assesse. Disallowance on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed ₹ 29,44,060/- as bad debts in profit loss account. The AO disallowed ₹ 4,74,404/- out of the same on the ground that these represent small balances with various parties and deposits in Government departments and no evidence of legal action was produced before us. 7. On appeal, the CIT(A) confirmed the action of the AO on the ground that no material was brought before him to show that these receivables became bad during the year under consideration. We find that it is not in dispute that the amount in question was actually written off as irrecoverable by the assessee in its books of accounts. The Revenue has brought no material to show that the amounts were not irrecoverable and the assessee actually received the amount at any time. We find that the Hon ble Supreme Court in the case of CIT Vs. Mysore Sugar Co. Ltd., (1962) 46 ITR 469 (SC) held that when advance was given during the course of business on revenue account, the loss on such advance is business loss on revenue account and is deductible. Therefore, in our considered view, the advances which were given during the course of business and which was not on the capital field, and in the absence of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to pay the arrears in instalments. It was submitted that no civil or criminal proceedings were initiated against the assessee. It was, therefore, prayed that the amount did not represent any payment for infringement of law, and the same was allowable as deduction to the assessee. 13. The CIT(A) after considering the submissions of the assessee held that the levy of sales-tax penalty was on account of infringement of sales-tax provisions and it amounts to offence, and therefore, was not allowable deduction, and confirmed the action of the AO. 14. Before us, the AR of the assessee submitted that in view of the decision of the Hon ble Punjab and Haryana High Court in the case of CIT Vs. Hoshiari Lal Kewal Krishan, (2009) 311 ITR 336, wherein it was held that penalty and fine for belated payment of excise duty is compensatory in nature, and disallowance made is required to be deleted. 15. On the other hand, DR supported the orders of the lower authorities. 16. We find that it is not in dispute that the assessee had paid salestax penalty of ₹ 2,68,063/-. We find that the Hon ble Punjab and Haryana High Court in the case of CIT Vs. Hoshiari Lal Kewal Krishnan (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee submitted that to cope up with tough competition, it was essential to stay in constant touch with the customers, and traveling expenses incurred by the assessee for such purposes. It was submitted that the sales of the company has increased from ₹ 5.16 crores to ₹ 12.61 crores. 21. The CIT(A) after considering the submissions of the assessee held that except for filing the air-tickets, no evidence, like the purpose of visit, tour report etc. were furnished to establish the business purpose of these expenditure. Therefore, CIT(A) confirmed the addition made by the AO. 22. Before us, the AR relied upon the submissions made before the CIT(A). 23. We find that the apart from making a general submission that the turnover of the assessee has increased, no specific error in the order of the CIT(A) could be pointed out by the AR. The purpose of visit and the business connection of the above expenditure could not be established by the assessee by producing relevant material. In the absence of the same, we do not find any good reason to interfere with the order of the CIT(A), which is confirmed. The ground of the appeal of the assessee is dismissed. 24. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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