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TMI Blog2020 (12) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... ut passing speaking order. In our opinion, it is appropriate to remit the issue back to the file of AO to pin point the exact expenditure which is personal in nature and where the Directors are benefitted by such expenditure. Accordingly, this issue is remitted to the AO for a fresh consideration. Disallowance of business development expenditure AND Club expenses - HELD THAT:- As discussed in the earlier para, the assessee has to establish that this expenditure was incurred only exclusively for the purpose of business by placing necessary evidence so as to entertain the foreign buyers. Accordingly, this issue is remitted to the file of AO for fresh consideration. Suppressed income of assessee - Sale receipts from sale of scrap silk yarn - difference between the value determined by AO and the value declared by assessee - HELD THAT:- There are various scraps like sale of acrylic yarn, sale of noil yarn, sale of silk yarn, sale of sleever, sale of spun silk yarn, sale of viscose yarn. Each one s value is different and the AO uniformly taken the value of each item per kg. at ₹ 1200/- per kg. which is not proper. Accordingly, we direct the AO to consider each type of ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow fell in error in assuming that the travel expenditure was to be demonstrated by correlating to the orders obtained, which is akin to the revenue sitting in the arm chair of the appellant to ascertain the purpose of every expenditure, on the facts and circumstances of the case. 5. The learned CIT(A) was not justified in confirming the disallowance of ₹ 3,50,291/- being business development expenditure, incurred for the purpose of business on the facts and circumstances of the case. 6. The learned CIT(A) was not justified in confirming the disallowance of ₹ 44,796/- being expenditure on clubs, which were necessary for hosting visiting clients etc, on the facts and circumstances of the case. 7. The learned CIT(A) was not justified in confirming the additions of ₹ 24,26,050/- being estimated sale of scrap silk yarn, by accepting the premise the AO that the scrap was also to be valued at the market rates, when(the appellant has detailed the reasons for sale of scrap, thus arriving at the erroneous finding that the additions made were to be sustained, on the facts and circumstances of the case. 8. The authorities below erred on facts in not appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. 4. The assessee prayed that additional ground be admitted in the interest of advancement of natural justice and these grounds were inadvertently not raised on earlier occasion and there is no necessity of investigation of any fresh facts on this issue and also placed reliance on the judgment of Supreme Court in the case of NTPC Vs. CIT 229 ITR 383. The DR did not put any strong objection for admission of additional grounds. 5. We have heard both the parties and perused the material on record. There is no necessity of investigation of any fresh facts on this issue and there is good and sufficient reason for not raising this ground in earlier occasion. Accordingly, by placing reliance on the judgment of Supreme Court in the case of NTPC cited supra, we admit the additional ground for adjudication. 6. Ground Nos.1 and 2 in main grounds of appeal is general which do not require adjudication. 6.1 Ground Nos.2 and 3 with regard to disallowance of travelling expenditure. The facts are that the assessee claimed an expenditure of ₹ 41,74,722/- as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to produce all details of this expenditure and thereafter AO has to re-examine the issue afresh. 8. Next ground is with regard to disallowance of club expenses at ₹ 44,796/-. The assessee incurred an expenditure of ₹ 89,592/- under the head clubs . Assessee not furnished the details of expenditure on behalf of whom this expenditure is incurred though it was treated that this was incurred towards foreign buyers. The AO disallowed 50% of ₹ 89,592/-, at ₹ 44,796/-. 8.1 We have heard both the parties and perused the material on record. As discussed in the earlier para, the assessee has to establish that this expenditure was incurred only exclusively for the purpose of business by placing necessary evidence so as to entertain the foreign buyers. Accordingly, this issue is remitted to the file of AO for fresh consideration. 9. Next ground is with regard to sale of scrap of silk yarn at ₹ 24,26,050/-. The assessee shown in the sale receipts from sale of scrap silk yarn of 3,547 kgs for ₹ 18,30,350/-. According to AO, the value of scrap silk yarn at ₹ 1,200/- per kg. he worked out the sale value of 3547 kgs at ₹ 1200/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of the case. 4. The learned CIT(A) was not justified in appreciating that the sale of the TDR, were not exigible to capital gains as held by various authorities and the same ought to have been deleted in the order passed, on the facts and circumstances of the case. 5. The learned CIT(A) has erred in law in appreciating that it is settled position of law that consent does not confer jurisdiction and the income of ₹ 59,94,346/ - not deleted by the AO, ought to have been deleted by the CIT(A), on the facts and circumstances of the case. 6. The learned CIT(A) was not justified in law in appreciating that the AO ought to have granted the benefit accruing to the appellant, by deleting the capital gains offered to tax inadvertently, in consonance with Circular No. 14 [XL-35] of 1955, dated April 11, 1955, on the facts and circumstances of the case. The learned CIT(A) was not justified in law in appreciating that the Appellant had an inherent right to make fresh claim before the Appellate authority which was not made by way of revised return in respect of an item of income that was not taxable under the law but offered wrongly / inadv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the computation of income. This plea of the assessee not considered by the CIT(A). Hence, in the interest of justice, we remit this issue back to the file of CIT(A) for proper adjudication instead of dismissing the issue as infructuous by CIT(A). 17. Next ground is with regard to addition of ₹ 11,57,408/- as interest income from other sources. The AO brought into tax an amount of ₹ 11,57,408/- under head interest income . According to AO, the assessee received interest from following parties: 1. Kotak Mahindra Bank Ltd., - 22,77039/- 2. SBI - 34,295/- 3. BESCOM - 39,875/- Total 23,49,209/- 18. The AO observed that assesse declared interest income of ₹ 12,73,688/- and there was under statement of interest income on this ground at ₹ 10,75,521/-. Similarly, there was an receipt of income of ₹ 81,887/- from the Executive Engineer. This was not offered to tax. The AO brought these two amounts totaling ₹ 11,57,408/- under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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