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TMI Blog2016 (1) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... in the ordinarily activity of the business of the company. The assessee has submitted all the details of advertisement and sales promotion expenses in CD form and in form of hard copy it was rendering into around 600 pages on for details. Each and every voucher has been maintained by the assessed as there is an audit has been made by the auditor and not qualifying comment had been made by him under this head. The ld Assessing Officer also even not made any addition in A.Y. 2006-07 under this head where the ratio of expenses increased up to 16.05%. In other year also i.e. A.Y. 2007-08 and 2009-10, the ld Assessing Officer has not disallowed any amount from this head on the ground that the assessee had not incurred these expenses wholly and exclusively for the business purposes - Decided in favour of assessee. - ITA No. 221/JP/2014 - - - Dated:- 14-12-2015 - Shri R. P. Tolani, JM And Shri T. R. Meena, AM For the Petitioner : Shri P.C. Parwal (CA) For the Respondent : Shri Kailash Mangal (JCIT) ORDER Per T. R. Meena, A. M. This is an appeal filed by the assessee against the order dated 12/02/2014 passed by the learned CIT(A), Alwar for A.Y. 2005-06. The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntories ₹ 8,81,19,911/-, Merchandising- ₹ 7,77,061/-, Sales Promothers- ₹ 5,44,11,963/-, Others ₹ 67,89,275/-. It is further noticed that the gross sales of the assessee have increased to ₹ 453,56,81,999/- as compared to gross sales of ₹ 424,33,09,514/- during the immediately preceding year, but the expenditure on advertisement and sales promotion has increased drastically to ₹ 63,98,61,831/- from ₹ 46,50,26,077/- during the last year. The complete bills and vouchers to justify these expenses have not been provided. There is no justification for such increase in advertisement and sales promotion expenses. In the absence of complete bills and vouchers of these expenses it cannot be established that all the expenditure was wholly and exclusively for business . Non business expenditure under this head cannot be ruled out and therefore to his expenditure is not allowable. In view of the above facts the disallowance on account of Advertisement expenses of ₹ 50,00,00/- made by the A.O. and subsequently confirmed by the ld CIT(A) is in order and as such no interference in the said addition/disallowances is warranted 3. Being agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the disallowance made by him and confirmed by CIT(A) is uncalled for. He further submitted that the expenditure has increased as compared to the last year to have the market penetration and to increase the sales. The position of sales and the expenditure incurred in various years is as under:- A.Y. Sales Expenses on Advertisement and Sales Promotion Expenses as % of sales Adhoc disallowance made by the AO 2002-03 4,70,08,16,930/- 38,69,51,744/- 8.23% Nil 2003-04 4,32,81,84,063/- 30,39,49,788/- 7.02% Nil 2004-05 4,24,33,09,514/- 46,50,26,077/- 10.96% 46,50,000/- [Appeal Pending before ITAT] 2005-06 4,53,56,81,999/- 63,98,61,831/- 14.11% 50,00,000/- (Present appeal) 2006-07 4,12,14,38,500/- 66,16,25,564/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing adhoc disallowance. He placed reliance on the following cases:- 1. Widex India (P) Ltd. Vs. DCIT (2012) 66 DTR 57 (Del.) (Trib.). 2. PNC Construction Co. Ltd Vs. DCIT (2013) 144 ITD 577 (Agra) (Trib.). 3. ACIT Vs. Ganpati Enterprises Ltd. (2013) 142 ITD 118 (Delhi) (Trib.). 4. CIT Vs. Symphony Comfort System Ltd. (2013) 216 Taxman 225 (Guj.) (HC) (Mag.). 5. Seasons Catering Services (P) Ltd. Vs. DCIT 43 DTR 397 (Del) (Trib). 6. CIT Vs. Oracle India (P) Ltd. 199 Taxman 181 (Del) (HC) (Mag.). 7. Arthur Anderson Co. Vs. ACIT (2010- TIOL-416-ITAT). In view of above, the disallowance confirmed by the CIT(A) be directed to be deleted. 5. At the outset, the ld DR has vehemently supported the order of the ld CIT(A) and argued that the assessee s expenses under this head is disproportionate with reference to sale and also has not been able to give the part vouchers of the expenses before the Assessing Officer. Therefore, he prayed to confirm the order of the ld CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on the record. It is undisputed fact that percentage of expenses on adve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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