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TMI Blog2023 (8) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... roper so as to warrant interference. The same is, therefore, upheld. The assessee s this ground of appeal fails. Travelling expenses - personal expenses or business expenses - Director who travelled to UK for exploring new market opportunity for their products in UK as the case made out by the assessee was not found to be acceptable as the assessee failed to substantiate that she explored the new market or efforts done by her to that effect - HELD THAT:- Even, before the First Appellate Authority, the assessee failed to furnish any evidence to establish that such expenditure had been incurred wholly and exclusively for the purpose of its business save and accept providing invoices and vouchers for tickets. Finally, the addition was, therefore, upheld by the Ld. CIT(A). We consider the reason assigned by the authorities below in the absence of any fresh evidence produced by the assessee before us or any argument advanced by the assessee or any assistance rendered by the assessee, just and proper without any ambiguity. The same is, therefore, upheld. This ground of appeal is, thus, dismissed. Sales promotion expenses - HELD THAT:- As addition was made and further upheld b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Sales Commission Rs. 4,70,711 2. Travel expense Rs. 1,53,133 3. Sales Promotion Rs. 2,89,095 4. Other expense Rs. 6,97,661 4. The addition in respect of sales commission to the tune of Rs. 4,70,711/- is under challenge before us. 5. During the course of assessment proceeding, upon perusal of the return of income, tax audit report, it was found that the assessee company charged to its Profit Loss Account an amount of Rs. 4,70,711/- as sales commission. The details of such commission along with names of the parties to whom such payment was made with address, PAN, rate of commission of each and every party and the contract, if any, executed between parties were directed to be produced whereupon the assessee submitted as follows: The details regarding the sales commission as desired by you are attached herewith the enclosure 17........... The enclosure 17 as annexed by the assessee stated as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the genuineness of the expenditure of sales commission is not established and I hereby, disallow the same. Therefore, an amount of Rs. 4,70,711 /- is added back to the income of the assessee. Penalty proceedings under section 271(1)(c) of the Income-tax Act, 1961 are also initiated as the company concealed the particulars of income and furnished inaccurate particulars of income. (Addition: Rs. 4,70,711 /-) 6. As the genuineness of expenditure of sales commission has not been found to be established by the assessee, the same was added to the total income of the assessee, which was, in turn, confirmed by the First Appellate Authority. Hence, the instant appeal filed before us. 7. Before the First Appellate Authority, the assessee submitted as follows: 2. W.R.T. Disallowance of sales Commission amounting to Rs. 470,711/ Sales Commission was paid to PABLO ELEXGARAY amounting to Rs. 470,711. TDS is deducted @ 22.66% amounting to Rs. 106,663/- The sales Commission was paid on 25/10/2010. The Business relation is established. The Contractual agreement is established. The Export Sales made is also established. The basis of calc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mations were provided during scrutiny proceedings. Need not to say that in case of export and import businesses various other agencies are Involved viz. Excise Opt, VAT Dept., FEMA and Banking channels. Hence quest/on of in-genuine does not arise at all as any bogus transact shall attract lots of rigorous applications of law. Lr.A.O. while assessing has verified and accepted the 'Export Sales'. Meaning thereby Sales shown in the Ledger as we/I as in the calculations of Sales Commission are well accepted. Further the same was never demanded during scrutiny proceedings. For your ready reference we are producing herewith copies of vouchers. Invoices, Bank payment documents, Commission sales agreement ledger copy at Annexure-1. Since the base of disallowance is wrong and bad in law the same deserves to be quashed. Your Honor is requested to delete disallowance of genuine -' Sales Commission' on export Sales of Rs. 470,711/-. 8. A remand report was called for and the same was forwarded to the appellant for rejoinder. As no compliance was made by the appellant therein, the Ld. CIT(A) upheld the order passed by the Ld. AO with the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant is bogus and hence, the action of the AO of disallowing the same is upheld. 9. It appears from the records that the assessee has filed a fabricated agreement during the course of appellate proceeding in order to justify the claim made by him, as the agreement was stated to be executed on 01.04.2011 but the date mentioned in such agreement was 01.04.2010. Nonetheless except for this agreement, the assessee not produced any invoice or voucher of the sales commission neither furnished quantitative details or details of sales of which commission had been computed and paid. In that view of the matter, we find no ambiguity in such order passed by the Ld. CIT(A), particularly, in the absence of any assistance made by the assessee before us. The order passed by the authorities below is found to be just and proper so as to warrant interference. The same is, therefore, upheld. The assessee s this ground of appeal fails. 10. The addition to the tune of Rs. 1,53,133/- in respect of travelling expenses incurred by the assessee is under challenge before us. 11. The assessee company claimed foreign travel expenses of Mrs. Rekha Nitin Parekh. The vouchers for verification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted. The Assessee submitted as follows: Ledger statements and copy of debit notes is attached which is self-explanatory. Further, the damage charges amounting to USD 13221.22 ie. Rs. 6,20,736/- are debited for loss in transit incurred against shipment to Norca Industrial Co. vide Invoice No. AEL/051. And damage charges amounting to USD 1700 Le. Rs. 76,925/- are debited for cleaning and painting rusted material gone against Invoice No. AEL/036 to M/s. Dodson Global Inc. 16. The detailed quantification or basis on which such expenses were booked was not reflecting from the invoice submitted by the assessee neither such invoices contained any stamp, seal, inward mark or receipt date and therefore, the same was found to be bogus. In the absence of proper invoices and vouchers, the same were added. 17. Before the First Appellate Authority, the assessee submitted the following: 5. W.R.T. Disallowance of Other Expenses amounting to Rs. 697,661/-. Norca Industrial Co. had issued a debit note for an amount of US$ 13221.22 covering damage charges that incurred during transit. It also includes US$ 1700 which the foreign buyer viz. M/s. Dodson Global I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lr.A.O. qualified the same as 'Bogus' with an observation that it does not contain stamp, seal, inward mark and so on. If your appellant want to go for Bogus claim into genuine claim, this is the criteria making stamp, seal inward mark etc. would not have cost even Rs. 100/-Does this mean by spending Rs. 100 your appellant should have made it genuine? This is not a base and background to qualify the same as 'Bogus'. Your appellant failed to understand what leads A.O. to qualify it as Bogus? (Just because there is no stamp, seal and Inward mark!!!) The communication received through mail has no value? Since the base of disallowance is wrong and bad in law the same deserves to be quashed. Your Honor is requested to delete disallowance of Other Expenses amounting to Rs. 697,661/-. 18. In the absence of any evidence and relevant details, the Ld. CIT(A) upheld the disallowance of claim of expenses except to the tune of Rs. 76,925/-, which has been issued by the purchaser M/s. Dotson Global Ink with the following observation: 9.2. I have considered the facts of the case, the submission of the appellant and the AR's observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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