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TMI Blog2015 (10) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting the entire disallowances made by the AO out of business promotion expenses of Rs. 15,78,532/-, electricity expenses of Rs. 1,24,221/- and rent payment of Rs. 1,04,750/- without appreciating the fact that the expenses under these heads were incurred by the assessee in cash and also in spite of sufficient opportunities has failed to produce bills / vouchers in support of these expenses and other details like names and addresses of the persons to whom the payment for these expenses were alleged to be made. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting 25% disallowances made by the AO out of books & periodicals expenses of Rs. 69,500/- and printing and stationery of R5.4,39,966/- to 10% without appreciating the fact that the assessee inspite of sufficient opportunities has failed to establish the co-relation between income offered and expenditure claimed under these heads with supporting documentary evidences. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting 25% disallowances made by the AO out of entertainment expenses of Rs. 6,58,692/- and miscellaneous ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case and in law, the Ld. CIT(A) has erred in restricting 25% disallowances made by the AO out of travelling expenses and conveyance expenses of Rs. 14,78,880/- to 10% of Rs. 3,69,720/- without appreciating the fact that the expenses claimed under this head amounted to Rs. 14,78,880/- and not Rs. 3,69,720/- and also the assessee in spite of sufficient opportunities has failed to produce proper documentary evidences to substantiate the expenses claimed under this head. 10. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting 25% disallowances made by the AO out of gift expenses of Rs. 1,07,665/- to 10% without appreciating the fact that the assessee even failed to produce basic information like its nature, kind and proof/ confirmation of the recipient in respect of expenses claimed under this head." 2. Ground No.1: Facts relating to Ground No.1 are that the assessee has been carrying on business of commission agent and commission income was shown at Rs. 1,64,06,455/- from Twinkle Envirotech Ltd. and Rs. 1,46,37,959/ from Royal Twinkle Star Club Ltd. As against the gross commission receipt of Rs. 3,10,44,414/- net profit be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions have carefully been considered. After careful consideration, we find that Ld. CIT(A) did not commit any error in granting appropriate relief to the assessee. It was the case of the assessee that he had earned total commission of Rs. 3,10,44,414/- from both the parties and confirmations were also submitted. The assessee also produced the TDS certificate in which correct amount was shown. In view of these evidences, we are of the opinion that there is no infirmity in the order of the Ld. CIT(A). The ground No.1 of the appeal is therefore dismissed. 6. Ground No. 2, 3, 4, 6, 8, 9 &10 are in respect of disallowance of expenditure in relation to business promotion, electricity, rent payment, Books and periodicals, printing and stationery, entertainment & misc. expenses, meeting expenses, vehicle expenses, depreciation, vehicle insurance, driver's salary, travelling expenses and gift expenses. The AO observed that the assessee, during the assessment year under consideration had debited the above stated various expenses to the P & L Account. The AO called for ledger account of electricity payment, rent payment and business promotion payment along with bills & vouchers. On verifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o nearly 600 persons in respect of whose membership assessee had earned commission and these amounts range from 1600 to 2100 and cannot be adequately vouched. The list of members in respect of whom commission paid was already submitted to the AO. On these facts Ld. CIT(A) observed that the entire expenses could not be disallowed. The assessee had discharged his burden of proof by submitting the name of the persons to whom such incentive/discount/commission had been paid. After considering the overall facts and circumstances of the case, the Ld. CIT(A) deleted the disallowance made on account of business promotion expenses, rent and electricity expenses. However, learned CIT(A) upheld the disallowance at 20% of the expenses incurred in respect of telephone and 10% of expenses incurred on account of vehicle, car depreciation and periodicals/printing and stationery, travelling and conveyance, entertainment & gift expenses. He also upheld the disallowance to the extent of 20% in respect of meeting expenses. Learned CIT(A) had also taken into consideration that according to the CBDT Instruction No.225/26/2006-ITA-II(Pt.) dated 8.9.2010, wherein guidelines for completion of scrutiny asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see submitted that the salary had been paid to 13 employees for the entire year with a salary range of Rs. 60,000/- to Rs. 1,20,000/- annually. There was no need to deduct tax as the employees' remuneration was below taxable limit. The Ld. CIT(A) considering the facts and circumstances of the case observed that an amount of Rs. 12,44,600/- was the bare minimum to be paid for a group of 13 employees for running the business. Huge income under the head commission had been offered to tax by the assessee and it could not be presumed that the establishment could be run without employees. He therefore finding the salary expenditures as genuine, allowed the same. After considering the reasoning given by the ld. CIT(A), we do not find any infirmity in the same. The findings of the Ld. CIT(A) on this issue are therefore upheld. 12. Ground No. 7 : The AO further observed that the assessee had received commission/brokerage of Rs. 75,636/- from Anik Development Corporation and hence added the same to the total income of the assessee. The assessee explained to the AO that Anik Development Corporation had refunded Rs. 75,636/- as extra labour work in flat purchase. The AO however did not find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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