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TMI Blog2019 (6) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld.CIT(A), after considering relevant facts and also taking note of the fact that there is no observations by the AO in regard to the incorrectness of books of account scaled down disallowance to 10% for such expenses. We do not find any reason to interfere with the findings recorded by the CIT(A) while deleting addition made by the AO towards disallowance of expenditure. - Decided in favour of assessee. - ITA No.3736/Mum/2017 - - - Dated:- 15-5-2019 - Shri Sandeep Gosain (JUDICIAL MEMBER) AND Shri G Manjunatha (ACCOUNTANT MEMBER) For the Appellant : Shri DG Pansari For the Respondent : Shri D.C. Jain ORDER PER G MANJUNATHA, AM : This appeal filed by the revenue is directed against order of the CIT(A)-9, Mumbai dated 15-02-2017 and it pertains to AY 2013-14. The revenue has raised the following grounds of appeal:- On the facts and in the circumstances of the case and in law, the Ld.CIT{A) erred in directing the assesseeing officer to restrict the disallowance of expenses to ₹ 11,97,281/-and deleting the balance disallowances of ₹ 1,07,75,5317- without apprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had been considered, however the same is not found to be satisfactory thus cannot be accepted. I In its reply the following expenses the assessee have only stated as mentioned be low:- Deepawali expenses - gifts i.e. sweets, cloth etc. given to employees other related to business of the company, Donation - given to charitable institutions, General charges - miscellaneous expenses i.e. washing of chandani, floor cover, cleaning materials etc,, Market management specialization expenses - education fees, paid by the company for management course of employee so that their skill can be utilized to increase the sales of the company, Travelling expenses - incurred by the employees for visiting various brandies of the company and suppliers places, Business promotion expenses (Gift) - sales promotion gifts given by the f.r^t.. company to its customers under various Sales promotions schemes, Business promotion (other) expenses - calander, diaries and bags given to customers of the company, Muhurt expenses - company organise muhurt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l increase in expenses in A.Y. 2013-14 and the A.Y. 2012-13 % of increase in AY 2013-14 over the A.Y. 2012-13 Remarks 1. Other expenses Deepawali Expenses 1207790 841170 366620 43.58% Non business/Personal nature 2. Other expenses Marketing Management Specialisation Expenses 2203579 0 2203679 100% Not explained 3. Other expenses Travelling expenses 9458115 5561367 3896748 70 Unreasonable Unexplained 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epenses Shlvratri sangeet mahotsav expenses has increased to ₹ 21,14,47,62/- i. e. there is an absolute increase reported of amount of ₹ 13,30,31,25/-. The expenditure has increase by a percentage of 62 % of the last year. Such type of high i. e. 62% increases in these expenses is beyond normal course not explained is not understandable. Further, despite having been asked the assessee has not furnished any evidence to prove the correctness. reasonableness, of increase neither the genuineness of these expenses have been proved, despite the fact that proving the genuineness of these: expenses, would have been in the interest of the assessee itself. But still the assessee has chosen not to place evidence in support of claiming these expenses . Even producing the bill voucher of expenditure in support of such increased expenses could not have helped until the assessee did not come forward to explain justify the increase in the expenses as genuineness ;''having been increased exclusively for the purpose of business. In absence of any satisfactory explanation, justification and for non-producing evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have perused facts at the case and details and submissions filed by the appellant before the AO and puling the appellate proceedings, I find that at the first plea the appellant has developed wholesale business which was only 784.02 crores in the year 2011-12 has jumped to 387.94 crores in the year under consideration. The expenses on Diwali, travelling, business promotion, muhurat shivratri, sangeet mahotsav etc. are regular from year to year, there is increase in expenses in comparison to earlier years due to various reasons e.g. increase in value of items increase in value of work, parties customers etc. Looking at the nature of expenses and the observation of the AO, it will be difficult to sustain the entire .estimated disallowance because the AO has not brought any concrete material to make any such huge disallowance. Therefore, keeping in view of the nature of expenses and the facts and circumstances of the case it will be reasonable to restrict the disallowance to ₹ 11,97,281/- and therefore the AO is directed to delete the balance disallowance of ₹ 1,07,75,531. 4. Aggrieved by the order of Ld.CIT(A), revenue is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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