9911796707
TMI Blog2015 (8) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... - CIT(A) allowing of 50 per cent - Held that:- While allowing 50 per cent. expenditure, the Commissioner of Income-tax (Appeals) has not given any reason. The contention of the assessee is that business promotion expenditure is towards incentives/gifts given to the representatives of customer companies to maintain cordial business relations. However, the assessee has not placed on record the details of the persons to whom such incentives were given. We do not find any reason in allowing even 50 per cent. of such expenditure in the absence of any document or any other evidence.- Decided against assessee. Disallowance of research and development expenses - CIT(A) allowing disallowance - Held that:-The assessee was able to establish before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leting of disallowance on research and development expenses. In the appeal for the assessment year 2008-09, the Revenue has raised single issue with regard to research and development expenses. 3. The appeal for the assessment year 2008-09 has been filed with the delay of 15 days. The Revenue has placed on record affidavit of Shri. A. S. Dinesh Kumar, Assistant Commissioner of Income-tax, Company Circle- IV(2), Coimbatore, giving reasons for delay in filing of the appeal. After perusal of the same, we find that delay in filing of appeal is not deliberate or intentional. The delay of 15 days in filing of the appeal is condoned and the appeal is admitted to be heard on merits. 4. The brief facts of the case are, that the assessee is a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income-tax (Appeals) on this issue. 6. Shri. S. Dasgupta, representing the Department submitted that the Commissioner of Income-tax (Appeals) erred in allowing local area expenses to the extent of 50 per cent. The assessee has not placed on record any evidence in support of the said expenditure. Further, the assessee has not deducted tax at source on the alleged payments made to owners of the land where parking facility for the trucks have been made. On the issue of business promotion expenses, the learned Departmental representative contended that no plausible reason has been given by the Commissioner of Income-tax (Appeals) for allowing 50 per cent. business promotion expenditure. In respect of the findings of the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. The said expenditure is allegedly made for creating parking facilities of the trucks carrying inward and outward materials/ goods of the assessee-company. The assessee has also alleged to have spent money for repair of link road connecting unit of the assessee at Perianacikenpalayam. The assessee has not placed on record the complete details of the local area expenses. The Commissioner of Income-tax (Appeals) has disallowed 50 per cent. of the expenditure claimed by the assessee after site inspection. The Commissioner of Income-tax (Appeals) has observed in his order that the road was in bad shape and the same been laid out temporarily for facilitation of the moment of the company trucks. The Commissioner of Income-tax (Appeals) restric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire business promotion expenses are disallowed. 10. The third issue raised by the Revenue in the appeal for the assessment year 2007-08 is with regard to research and development expenses. This issue is also raised in appeal for the assessment year 2008-09. The assessee has made payment of ₹ 2,00,00,000 in assessment year 2007-08 and ₹ 50,00,000 in assessment year 2008-09 to M/s. Adwaith Textiles Ltd. for using its premises for installing machines and making observation under actual working conditions. The assessee had entered into an agreement dated December 14, 1998 with M/s. Adwaith Textiles Ltd. to undertake research and development activities under mill conditions. The assessee has installed different kind of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at M/s. Adwaith Textiles Ltd. suffered production loss and also the quality of yarn because of frequent interruption in production. The Commissioner of Income-tax (Appeals) in his order has categorically observed that the amount paid by the assessee to M/s. Adwaith Textiles Ltd. for using the mill floor facility has been assessed to tax in the relevant assessment years. The Revenue has not been able to controvert the findings of the Commissioner of Income-tax (Appeals). We do find any reason to interfere with the well reasoned findings of the first appellate authority in deleting the disallowance of research and development expenses. This ground of appeal of the Revenue is dismissed, accordingly. 11. So far as the objection of the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
