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TMI Blog2016 (1) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... to the volume of expenditure incurred by the assessee under this head. Even in respect of this expenditure the payment in question has been made by account payee cheques. A perusal of the bills and vouchers shows that the expenditure in question has been incurred on purchase of gift items. Thus it is clear that the assessee has established incurring of business promotion/sales promotion expenses. AO/CIT(A) have not given any valid basis as to why these expenses should not be regarded as permissible deduction. CIT(A) having accepted that the expenditure in question is wholly and exclusively for the purpose of business of the assessee ought to have allowed the entire deduction. He ought not to sustained part of the addition on a wrong assumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s)-XXXVI, Kolkata has erred in law as well as in fact in confirming the disallowance and addition of an expenditure of ₹ 1,38,32,946/- for Business/Sales promotion Expenses. Revenue's Grounds of appeal (1) That on the facts and circumstances of the case the learned CIT(A) has erred in deleting addition of ₹ 2,66,66,749/- out of total disallowance/addition of ₹ 4,16,65,896 made by AO in respect of sales promotion expenses relying on the submission and bills for cost of the purchase submitted by the assessee .. (2) That on the facts and circumstances of the case the learned CIT(A) has erred in deleting the additions of ₹ 2,66,66,749/- out of total disallowance of ₹ 4,16,65,896 made in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expense in question was wholly and exclusively incurred for the purpose of business of the assessee. 6. The CIT(A) after taking consideration of the photo copies of the bills and evidences of payment of the expenses through banking channels concluded as follows:- Matter was examined in details. Appellant was asked to produce all bills relating to business promotion and sales with various schemes. Appellant produced all bills relating to sales promotion except of ₹ 1,38,32,946/-. These bills were not found to be available with them. Out of these many are cash vouchers and they were also not produced. In the absence of bills and vouchers expenses to the extent of ₹ 1,38,32,946/- could not be verified and linked with vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of payment made to P.A.Time Industries, no bills and vouchers have been filed. The payments to this party totalling ₹ 8,70,000/- is negligible compared to the volume of expenditure incurred by the assessee under this head. Even in respect of this expenditure the payment in question has been made by account payee cheques. A perusal of the bills and vouchers shows that the expenditure in question has been incurred on purchase of gift items. Thus it is clear that the assessee has established incurring of business promotion/sales promotion expenses. AO/CIT(A) have not given any valid basis as to why these expenses should not be regarded as permissible deduction. CIT(A) having accepted that the expenditure in question is wholly and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actual situation is not so. The Assessee pointed out that the Ld. AO has considered the salary register for the month of March, 2007 only. For that reason the Ld. AO has arrived at a wrong conclusion that for 17 branches there was no staff of the firm. The Assessee also pointed out that there are bound to be some expenses for the maintenance of the branches like Rent, Electricity, Stationery and Travelling etc. Also, through the 17 branches (as mentioned by the Ld. A.O. in his assement order) business was generated. The generation of business by itself justify the expenses. A list of Branches of the assessee and the names of the Employees along with their Posting Branches was also filed before CIT(A) by the Assessee to substantiate its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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