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TMI Blog2018 (12) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 - - - Dated:- 28-9-2018 - Shri Waseem Ahmed, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri Chandramauli Rajpara And Shri Bhima Obedara For the Respondent : Shri Mudit Nagpal, Sr.DR ORDER PER Ms. MADHUMITA ROY - JM: The instant appeal has been filed by the assessee before us against the order dated 21.01.2016 passed by the Commissioner of Income Tax(Appeals)-2, Ahmedabad [Ld.CIT(A) in short] for Assessment Year (AY) 2012-13 arising out of the order dated 05.11.2014 passed by the DCIT, Circle-4, Ahmedabad with the following ground of appeal: 1. The learned CIT(A) erred on the facts and circumstances of the case and in law in confirming the disallowance of ₹ 9,66,659/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oning given by the assessee and in the absence of any third party evidence for the payment of business development expenditure and the clarity in the increase of business development expenditure expenses as worked out by the assessee particularly towards cash discount paid to different persons on insurance of their vehicles could not be verified and justified as has been incurred wholly and exclusively for business purpose, the Ld. AO disallowed 50% of such development expenditure to the tune of ₹ 20,75,790/- treating the same not to have been incurred for the business purposes and added to the total income of the assessee. 4. In appeal, the Ld. CIT(A) disallowed a lump sum claim at @2% of the commission income derived by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere also furnished. It is relevant to mention that the entire amount was made to the said 1364 persons in cash. Apart from that, 51 self made internal debit vouchers were also furnished by the assessee on sample basis. The Ld.AO came to a finding that all these self made vouchers were prepared and signed by particular person on single sitting. He also took the trouble to clarify the same by explaining those vouchers in details and recorded in his order. Some of the vouchers do not contain the full signature of the payees, some of them were blank, some of the signatures are illegible, some of which were not specifying the name upon whom the payment of cash discounts were made. Some of the vouchers having no signature at the appropriate place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure compare to the last year, has not been furnished by him thereby justification of increase in business development expenditure has been failed to be furnished by the assessee. It appears that, there was increase in policies at 124% and the increase in the revenue was only 47%. The 51 self made internal debit vouchers in support of such claim were really not opened for verifications for the reason as already dealt with by the Ld. AO as pointed out by us as above. Apart from that, the assessee during the relevant year renewed 1364 policies the business development expenditure whereof was ₹ 41,51,580/-, whereas for renewal of 488 policies during the AY 2011-12 the business development expenditure was incurred to the tune of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same in the year under consideration but the appellant has given the reasons for increase in the claim due to the high competition prevailing which is growing day by day. Thus to retain and attract the customers the cash discount has to be given which has resulted ultimately in increase of commission of income and number of policies issued. Considering both the aspects from the AO and appellant it is found that the claim of the appellant was highly excessive in the year under consideration but considering the submission of the appellant partly it would be fair and reasonable to disallow a lumpsum claim @2# of the commission income derived by the appellant in the year under consideration. Thus disallowance works out to ₹ 966659/- (2# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers passed by the authorities below as well as the findings and observations made the Ld. CIT(A). We find that the assessee failed to furnish adequate documents to support his claim of business expenditure particularly for providing cash discount upon insurance of vehicles which according to us is excessive and highly disproportionate to the expenditure incurred on this account in the earlier year. We find no justification in interfering with the order passed by the Ld.CIT(A). We, therefore, confirm the order passed by the Ld.CIT(A) on the disallowance to the tune of ₹ 9,66,659/-. Thus, the ground of appeal preferred by the assessee is dismissed. 10. In the result, the appeal of the assessee is dismissed. This Order pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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