9911796707
TMI Blog2019 (4) TMI 1580X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are required to run business successfully & normally. It was submitted that the AO on an adhoc basis has disallowed 20% of sales promotion, conveyance expenses, miscellaneous expenses and repair & maintenance expenses. Further, the ld. CIT(A) has given a finding that the AO made disallowance without any evidence on record but has maintained the disallowance to the extent of 10% of the expenses. It was submitted that the ld. CIT(A) has not examined that bills were available on record for all the expenses except for petty amounts which are required to be paid in cash for which self made vouchers were available. It was submitted that sales promotion expenses includes advertisement in newspapers, expenses on demo of machinery, conference exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground no. 2, the assessee has challenged the addition of Rs. 69,270/- made by the AO U/s 41(1) of the Act. During the course of hearing, the ld. AR has submitted that the assessee has engaged M/s Shekawati Courier & Cargo and instruction were given that no delivery of goods to customers should be made without receipt of cheque and in case, consignee does not give cheque for goods, the goods are required to be delivered to their Bikaner office. It was submitted that the transporter has delivered the goods to the customer namely Mr. Ram Kishan choudhary without obtaining cheque/payment. It was submitted that the assessee has not made the payment of freight to the transporter and has tried to recover the amount from consignee but in spite of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the account was squared up, the additions, if at all can be made in assessment year 2015-16 and not in the impugned assessment year. 6. Per contra, the ld. DR has relied upon the finding of the lower authorities and in particular, our reference was drawn to the findings of the ld. CIT(A) which are reproduced as under:- "(iii) I have duly considered the submissions of the appellant, assessment order and the material placed on record. It appears that during the appellate proceedings, the appellant has changed its stand as made before the AO. Further, on a perusal of the ledger account of Shekhawati Courier & Cargo as appearing in the books of accounts of the appellant, it was observed that there was opening credit of Rs. 26,085/- as on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich remained the same till 01.04.2014 and on the same date, through a journal entry, an amount of Rs. 69,270 was debited in the said account and the account was squared up. In the ledger account of Ramkishan Coudhary, there was a debit balance of Rs. 1,57,721/- on 31.03.2011 which remained the same till 01.04.2014 and on the same date through journal entry, a sum of Rs. 69,270/- was credited. Therefore, as on last day of the financial year i.e, 31.03.2012 relevant to impugned assessment year, the amount of Rs. 69,270 stood credited in the account of Shekhawati Courier & Cargo. The act of square up of the said account with the trade debtor happened in subsequent financial year 2014-15 relevant to assessment year 2015-16. In absence of any f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the Coordinate Bench decision in case of DNV GL AS (ITA No. 4687/Mum/2016 dated 31.05.2017) as the said decision has been rendered in the context of interest on delayed payment of TDS. It was further submitted that the AO has wrongly observed that borrowed funds have been used for payment of service tax merely for the reason that such interest has been clubbed under the head "Interest paid to others". It was accordingly submitted that the interest paid on late deposit of service tax being compensatory in nature is duly allowable and therefore, the addition so made by the lower authorities should be deleted. 9. Per contra, the ld. DR has relied upon the decision of lower authorities and in support, reliance was placed on the Coordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions, it provides that any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits or gains. What it therefore provides is the rate or tax levied on the profits/gains of any business or profession. The interest on service tax is not a tax levied on the profits/gains of any business or profession. Thus, the very foundation of disallowance by invoking the provisions of section 40(a)(ii) is not satisfied in the instant case. Further, the decision relied upon by the ld CIT(A) is distinguishable as the said decision deals with case of interest on late deposit of TDS which was disallowed by the AO u/s 37(1) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
