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TMI Blog2017 (6) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... . Rs.7,14,576/- Rs. 5, 00, 000/- 2.4 Vehicle Running & Maintenance Exp. Rs. 2,45,931/- 2.5 Business Development Exp. Rs.5,00,000/- 2.4 Function Exp. Rs.7, 08,210/- Rs.3,54,105/- TOTAL Rs.11,54,105/- The disallowances so made and partly confirmed by the Id. CIT(A) being totally contrary to the provisions of law and facts of the case, kindly be deleted in full. 3. The Id. AO further erred in law as well as on the facts, of the case in charging interest u/s 234A, 234B, 234C & 234D of the Act and as also in withdrawing interest u/s 244A of the Act. The appellant totally denies its liability of charging and withdrawal of any such interest. The interest so charged/withdrawn, being contrary to the provisions of law and facts, kindly be deleted in full" 2. The relevant facts of the case are that the assessee's return in the year under consideration was picked up for scrutiny wherein the AO qua the issues raised in the appeal filed, made the following observations while making the respective disallowances holding as under : "2.1 Disallowance out of Traveling & Conveyance Expenses : On perusal of profit and loss account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred in cash are internal supported d vouchers only. In the absence of availability of log book the vehicle running and maintenance used by the assessee company and their members cannot be denied for personal and non business purposes cannot be ruled out also. Hence, a sum @10% of Rs. 24,59,313/- i.e. Rs. 2,45,931/-is disallowed and added to the income of the assessee. (Disallowance of Rs. Rs. 2.45.931/-) 2.5 Disallowance out of Business Development Expenses The assessee debited a sum of Rs.. 1,32,68,347/- in its profit and loss account under the head "Business development expenses". The details furnished reveals that mostly of these expenses are incurred in cash and are supported with the self made vouchers only. In the absence of the proper bills, these expenses cannot be said to have been incurred wholly and exclusively for the purposes of the business. Hence, in view of the above to cover any possible leakage of revenue, a lump sum amount of Rs. 5,00,000/- is disallowed and added to the total income of the assessee (Disallowance of Rs. 5,00,000) 2.6 Disallowance out of Function Expense The assessee debited a sum of Rs. 70,82,101/- in its profit and loss account u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- under each head (total Rs. 3, 00,000/-) is directed to be deleted. This part of Ground of appeal no 4 [(i) & (ii)] is partly allowed. 3.1 Similarly, the disallowance made of the expenses claimed under the head "Office Expenses" holding as under : I have gone through assessee's submission and AO's findings. My predecessor had dealt with the above three issues at Ground 4 (iii), (iv) &(v) as well while deciding the assessee's appeal for Assessment Year 2011-12 vide Appeal No.56/14-15 (Date of Order: 16/06/2015), whereby on this issue he had held as Under :- I have gone through assessee's submission and AO's findings. Considering the non verifiable nature, some disallowance was justified. Considering the facts of the case, a disallowance of Rs. 4,00,000/- is considered reasonable and confirmed. The AO is directed to delete balance addition of Rs. 6,04,906/-. This ground of appeal is partly allowed. Respectfully following the same line of decision since the facts are similar in this year as well and especially since the supporting documents were not satisfactory as brought out by the A.O. some disallowance is considered reasonable under each of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tures. Under the staff welfare expenses, it was submitted, that the amounts include the tea & coffee refreshments provided to the staff, birthday gift and other expenditure on the welfare of the staff and the expenses incurred on the promotion of their working efficiencies, under the head office expenses the day to day incidental business expenses have been claimed. Donation has been considered to be disallowable and has been separately disallowed. Vehicle running and maintenance expenses were again incurred at all these 18 centers exclusively for the company's business purposes but did not include any personal expenditure of Directors and relatives and this has been clubbed by the CIT(A) alongwith 'Office Expenses' and 'Business Development". The "Business Development Expenses", it was submitted are promotional activities as the expenses for seminars and conferences are held through out the country. The pamphlets etc. are distributed. The function expenses pertain to celebration every year of its Sthapna Diwas i.e. on 11th April, the awards on the declaration of the results of the different examinations like of FITJEE, NIT etc. are given to the successful candidates and they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company's business purpose and did not indicate any personal expenditure either of Directors or relatives and has been clubbed by the CIT(A) alongwith "Office Expenses" and "Business Development Expenses" which constituted the expenses pertaining to the promotional activities of the assessee. The function expenses were stated to be expenses pertaining to the Sthapna Diwas i.e. 11th April, wherein function after the declaration of the results of different examinations like FITJEE, and NIT etc. where the successful candidates were honoured and all students alongwith their parents and other celebrities from the town or outside the town were invited. 6.1 Considering the aforesaid submissions made, we find that none of the facts are coming out from the orders of the authorities. The AO has made general observations while making disallowance what is the basis for concluding that the expenditure claimed is not subject to verification qua the traveling and function expenses, staff welfare expenses, office expenses is not coming out from the order except qua vehicle running and maintenance expenses where no Log Book is found to have been maintained. Similarly qua the function expenses, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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