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TMI Blog2015 (8) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively. 2. In the appeal for the assessment year 2007-08, the Revenue has raised three issues (i) Allowing local area expenses to the extent of 50 per cent. ; (ii) Allowing business promotion expenses to the extent of 50 per cent. ; and (iii) Deleting 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appellate authority reversed the findings of the Assessing Officer and allowed the claim of the assessee with reference to research and development expenses. The Revenue has now impugned the findings of the Commissioner 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities below. The first issue in the appeal for the assessment year 2007-08 is with regard to allowing of 50 per cent. of local area expenditure. The assessee has claimed Rs. 21,65,286 as local area expenditure. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. This ground of the Revenue is allowed and 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 Rs. 2,00,00,000 in assessment year 2007-08 and Rs. 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 int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual utilisation capacity of M/s. Adwaith Textiles Ltd. during research and development activities. The assessee was able to establish before the Commissioner of Income-tax (Appeals) that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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