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TMI Blog2019 (11) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is a Private Limited Company and filed return of income declaring loss of Rs. 51,53,551/-. During the year under consideration, the assessee company was engaged in the business of trading in properties, property commission and advisory income etc. The A.O. examined the details and documents produced on record and noticed that assessee claimed and debited Rs. 42,98,352/- on account of business promotion under the head of administration and other expenses. The assessee company, submitted that Business Promotion expenses incurred for the business purpose of assessee company. The assessee company with its sister concern company namely M/s Delite Buildwell Pvt. ltd. has made arrangement with Lodhi Property company Ltd. for providing acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, it is to be stated that merely mentioning that the parties have been advanced money does not prove any linkage with expenses been made and then there is no nexus with the expenses and business of the assessee company. Therefore, in the absence of relation to be explained, the remaining 6/7th of the expenses i.e., Rs. 35,18,868/- was disallowed. 3. The assessee challenged the addition before the Ld. CIT(A) and same facts were reiterated. It was submitted that copies of the bills and other documentary evidences were filed to show business expenses were incurred for business expediencies. It was further submitted that business guests who visited Delhi for business arrangement with assessee company, the assessee company since having regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions made before the authorities below and submitted that since assessee wanted to have a Central Office in Delhi, therefore, accommodation in Lodhi Hotel was taken for business purposes with associate company. Accommodation is taken wholly and exclusively for business purpose only. The A.O. cannot step into the shoes of a businessman as to how to conduct business. He has referred to PB-26 which is copy of the ledger account of business promotion expenses etc., along with hotel bills issued by Lodhi Hotel. Pb-43 is details furnished before A.O. explaining the reasons for taking premises for business purpose. PB-45 is copy of Management Certificate and other replies received from Lodhi Hotel. PB-59 is reply under section 133(6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B through which accommodation is provided to the assessee and its associates. The charges are paid in equal share. It is provided in the agreement that to ensure that all nonregistered guests should leave the suite before mid-night. The agreement also provides user of the facilities by the assessee and installation of business equipment etc., The same agreement is renewed time to time. On the basis of the same agreement, the assessee claimed business promotion expenses in preceding A.Y. 2013-2014 in which the A.O. in the Order under section 143(3) disallowed 10% out of sale promotion expenses. No disallowance have been made in A.Ys. 2014-2015 as well as 2016-2017 of the similar nature. Lodhi Hotel has confirmed taking of the premises by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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