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TMI Blog2021 (6) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... diture. Therefore, to ascertain facts with regard to nature of expenditure, issue has been set aside to file of the AO and direct him to cause necessary enquiries and take appropriate decision in accordance with law. Addition towards difference in export turnover - AO has made addition towards export turnover on the basis of information available with Income Tax Department and sales declared by the assessee in the P L account, on the ground that the assessee has failed to file necessary reconciliation explaining difference in turnover - HELD THAT:- We find that the AO has made addition towards difference in export turnover on the basis of information available with the Department, but such information was not furnished to the assessee. It is a well settled principle of law that before taking any adverse view, it is bounded duty of the AO to show-cause to the assessee as to why he is proposing such addition and also furnish information relied upon by the AO to arrive at such conclusion. In this case, it is the claim of the assessee that information relied upon by the AO to make addition towards export turnover was not furnished to the assessee. Therefore, we are of cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.: 306/CHNY/2020 - - - Dated:- 11-6-2021 - Shri V. Durga Rao, Judicial Member And Shri G. Manjunatha, Accountant Member For the Appellant : Shri S. Sridhar, Advocate For the Respondent : Shri Suresh Periasamy, JCIT ORDER PER G. MANJUNATHA, AM: This appeal filed by the assessee is directed against order of learned Commissioner of Income Tax (Appeals)-6, Chennai, dated 05.02.2020 and pertains to assessment year 2015-16. 2. The assessee has raised the following grounds of appeal:- 1. The order of the Commissioner of Income Tax (Appeals) - 6, Chennai dated 05.02.2020 in I.T.A.No.48/CIT(A)-6/2017-18, for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT(Appeals) erred in sustaining the disallowance of the claim of weighted deduction u/s 35(2AB) of the Act aggregating to ₹ 8,16,377 /- in the computation of taxable total income without assigning proper reasons and justification. 3. The CIT(Appeals) failed to appreciate that the reasons given in para 5 of the impugned order to sustain the addition were not correct and ought to have appreciated that there was no proper consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales promotion expenses of ₹ 4,00,000/- and addition of ₹ 43,81,384/- towards deferred revenue expenditure written off. The assessee preferred an appeal before the first appellate authority but could not succeed. The ld.CIT(A) for reasons recorded in his appellate order dated 05.02.2020 confirmed additions made by the AO and dismissed appeal filed by the assessee. Aggrieved by the CIT(A) order, the assessee is in appeal before us. 4. The first issue that came up for our consideration from Ground Nos.2 3 of assessee appeal is, disallowance of weighted deduction u/s.35(2AB) of the Act. During the year under consideration, the assessee has claimed weighted deduction of ₹ 67,39,377/- u/s.35(2AB) of the Act, towards expenses incurred for In-house Research and Development facilities. The AO has disallowed a sum of ₹ 8,16,377/- on the ground that the Ministry of Science and Technology had approved weighted deduction u/s.35(2AB) of the Act for an amount of ₹ 59,23,000/- only and hence, excess claim of deduction of ₹ 8,16,377/- has been added back to the total income. 4.1 The ld.AR for the assessee submitted that the ld.CIT(A) has erred in sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The next issue that came up for our consideration from Ground Nos. 4 5 of assessee appeal is, addition towards difference in export turnover. The AO has made addition of ₹ 6,91,890/- towards export turnover on the basis of information available with Income Tax Department and sales declared by the assessee in the P L account, on the ground that the assessee has failed to file necessary reconciliation explaining difference in turnover. It was the claim of the assessee before the lower authorities that information relied upon by the AO to quantify difference in export turnover was not furnished to the assessee. The assessee further claimed that it has furnished all possible evidences to prove that there is no difference in turnover as per its record. 5.1 Having heard both sides and considered material on record, we find that the AO has made addition towards difference in export turnover on the basis of information available with the Department, but such information was not furnished to the assessee. It is a well settled principle of law that before taking any adverse view, it is bounded duty of the AO to show-cause to the assessee as to why he is proposing such add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure in view of benefit extending to more than one year and had proportionately written off / charged expenses to the P L account for earlier years. However, for the assessment year under consideration, the assessee had changed its policy of accounting due to the fact that it had discontinued business in relation to various products / parties / countries on which such registration fees were paid and hence, expenditure classified under deferred revenue expenditure has been written off to P L account. The AO has disallowed deferred revenue expenditure written off on the ground that said expenditure pertains to earlier year and hence takes characteristics of prior period expenses and thus cannot be allowed as deduction. 7.1 The ld.AR for the assessee referring to paper-book filed for this purpose submitted that the assessee has paid registration fees across the globe for various products, however it has discontinued business in relation to various products / parties / countries on which such registration fees were paid and hence, fees paid for registration of products has been charged off to P L account. The ld.AR further submitted that the assessee has also furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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