9911796707
TMI Blog2023 (1) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of assessee for the AY 2006-07, 2007-08, 2008-09, 2009- 10, 2010-11, 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16 by the ld. CIT (Appeal), Rohtak and also upheld by the Co-ordinate Bench of ITAT for AY 2006-07, 2007-08, 2008-09, 2009-10, 2010-11 [ 2016 (7) TMI 1669 - ITAT DELHI] , 2011-12 [ 2019 (4) TMI 200 - ITAT DELHI] and 2012-13 [ 2017 (10) TMI 1622 - ITAT DELHI] Excess Depreciation - AO disallowed a sum being excess Depreciation claimed in original Return however the assessee has already revised its return and added back the same suo moto. Hence, we decline to interfere with the order of the ld. CIT(A) on this issue. Sales Promotion Expenses - Assessee company has over 4000 dealers nationwide along with various other worldwide buyers and company executives need to visit, entertain these dealers from time to time to keep them happy since companies products can only be sold through network of these dealers. It is essential need for the growth of the company and its survival through competition to be in constant touch with them so as to motivate them to achieve the desired sales. These gifts are distributed among dealers who are selling the product of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head miscellaneous expenses as the assessee failed to justify that the same were incurred for the business purpose. 4. The Ld. CIT(A) has erred in law and fact in deleting the addition of Rs. 3,00,000/- was made by the A.O. on account of consultancy expenses as these amounts were paid to different persons on various dates and the assessee has failed to establish the details of services obtained there from and the rate of payment. 5. The Ld. CIT(A) has erred in law and fact in deleting the addition of Rs. 2,97,597/- made by the A.O. out of the Advertisement in newspaper expenses as the assessee failed to explain that the expenditure incurred on account of Advertisement in Newspaper was incurred wholly and exclusively for the business purposes. 6. The Ld. CIT(A) has erred in law and fact in deleting the addition of Rs. 4,93,692/- was made by the A.O. on account of Glow Sign Board Expenses since the Glow Sign Boards are having longer life and therefore, whole of the expenses cannot be debited/consider for one year. 7. The Ld. CIT(A) has erred in law and fact in deleting the addition of Rs. 2,00,000/- was made by the A.O. on account of staff welfare ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment published in Hindustan Times under the head Advertisement and Sales Promotion Head. (v) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law as well as on facts deleting the addition of Rs. 2,00,000/- which was aptly made by the A.O. on account of staff welfare expenses under the head Workers and Staff Welfare for which no bills and vouchers were produced. (vi) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law as well as on facts deleting the addition of Rs. 5,00,000/- out of total of Rs. 558.38 lakhs made on foreign travel expenses on a/c disallowance aptly made by the A.O. stating that the entire foreign travel expenses cannot be said to be exclusively for business purpose. (vii) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law as well as on facts deleting the addition of Rs. 19,25,000/- made under the head Excess depreciation claimed. (viii) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law as well as on facts deleting the addition of Rs. 2,00,000/- which was aptly made by the A.O. under the head Sales Promotion/Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest bearing funds for non business purposes. 9. It is a fact on record that the company has taken strict actions against Mr. Arun Kapur and terminated his services and taken all possible legal measures to resolve the matter. Even otherwise, these misappropriated funds cannot be assumed to be from the interest bearing funds since in the relevant year (as on 31st March, 2002), company had following interest free funds: (i) Share Capital Rs. 3.25 Crore (ii) Securities Premium Rs. 6.06 Crore (iii) Free Reserves Rs. 44.46 Crore (iv) Debenture Redemption Reserve Rs. 8.25 Crore (v) Accumulated Depreciation Reserve Rs. 43.92 Crore Total Interest Free Funds Rs.105.94 Crore Therefore, it was argued that no disallowance can be made. 10. The ld. CIT(A) held that the assessee had shown an advance of Rs 13,40,67,226/- to Sh. Arun Kapur who has supposedly embezzled these funds and documentary evidence was given to show that it was beyond the contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Staff Welfare Expenses: 22. The A.O disallowed a sum of Rs 2,00,000/- out of staff welfare Expenses under the head workers welfare. The A.O has made this addition on adhoc and Lump sum basis without pinpointing specific vouchers or bills of inadmissible in nature. 23. At the outset, it was brought to our notice that the issue has been decided in favour of the assessee for the AY 2006-07, 2007-08, 2008-09, 2009- 10, 2010-11, 201112, 2012-13, 2013-14, 2014-15 and 2015-16 by the ld. CIT (Appeal), Rohtak and also upheld by the Co-ordinate Bench of ITAT for AY 2006-07, 2007-08, 2008-09, 2009-10, 201011, 2011-12 and 2012-13. 24. Hence, we decline to interfere with the order of the ld. CIT(A) on this issue. Foreign Travel Expenses: 25. The Assessing Officer disallowed a sum of Rs.5,00,000/-out of Foreign Travel expense under the head Traveling expense. It was argued that these expenses are exclusively for business purposes and quantum of expenses is in line with the previous years which is evident from below given figures: Financial Year FOB Value of Export Value of Imported Items Total of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work of these dealers. It is essential need for the growth of the company and its survival through competition to be in constant touch with them so as to motivate them to achieve the desired sales. These gifts are distributed among dealers who are selling the product of the company and are its lifeline. A reasonable amount spent on distribution of some gifts to them certainly promotes goodwill and enhances business interests. The above payments are made as gifts to dealers and shagun on the marriage of dealers and staff which is an effective tool for Business promotion as well as staff welfare. The A.O has made this addition on ad-hoc and Lump sum basis. 30. At the outset, it was brought to our notice that the issue has been decided in favour of the assessee by the Coordinate Bench of ITAT for A.Y. 2012-13. 31. Hence, we decline to interfere with the order of the ld. CIT(A) on this issue. A.Y. 2015-16: Glow Sign Board Expenses: 32. This issue stands squarely covered by the order of the Tribunal in the previous year wherein it was treated that since the glow sign boards are not owned by the assessee they cannot be treated as capital expenditure. Hence, we de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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