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TMI Blog2023 (10) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Department, which was discharged during the year under consideration. Since the deletion of the addition is after verification of evidences by the ld. CIT(A), we do not find any error or infirmity in the findings of the ld. CIT(A). Expenses towards business promotion - AO observed that these expenses were claimed to be paid through credit cards of the Directors thus element of personal expenses cannot be ruled out - CIT(A) Restricted the disallowance to 20% - HELD THAT:- Since the assessee is a limited company, there cannot be any personal element in the expenses claimed by it. If the AO is of the opinion that certain expenses may have the color of personal expenses/benefits extended to the directors of the company, then the same should be treated as perquisites in the hands of the directors but the expenses cannot be disallowed as having personal element in it. Secondly, it is difficult to ascertain which vouchers or bills pertained to personal expenses and which pertained to business promotion, as the directors of the company were entertaining customers during the Common Wealth Games. We do not find any merit in the disallowance made by the AO and restriction done by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 62,79,183/- when the assessee itself has shown scrap value at Rs. 1,03,35,511/-. - Shri N.K. Billaiya, Accountant Member, And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Dr. Rakesh Gupta, Adv, Shri Somil Aggarwal, Adv For the Department : Shri Vivek Kumar Upadhyay, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- The above captioned two cross appeals by the Revenue and the assessee are preferred against the order of the ld. CIT(A) 32, New Delhi dated 09.10.2014 pertaining to Assessment Year 2011-12. 2. Since common grievances are involved in the captioned appeals, they were heard together and are disposed of by this common order for the sake of convenience and brevity. ITA No. 457/DEL/2015 [Revenue s Appeal] 3. Ground No. 1 relates to the deletion of addition of Rs. 10,02,57,308/- on account of reversing amount. 4. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has reversed bills of Rs. 9.81 crores and Rs. 21.63 lakhs from M/s Nussli [Switzerland] Ltd and M/s Consortium Nussli Comfort Net on account of uncertainty of receiving of sale proceeds. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roof, the Assessing Officer disallowed the same. 16. When the matter was agitated before the ld. CIT(A), the assessee furnished evidence of additional Sales Tax paid by it and on verification, the ld. CIT(A) found the claim to be in order and allowed the same. 17. We find that the additional tax was paid as liability by the assessee for additional tax payment raised by the Sales Tax Department, which was discharged during the year under consideration. Since the deletion of the addition is after verification of evidences by the ld. CIT(A), we do not find any error or infirmity in the findings of the ld. CIT(A). Ground No. 2 is, accordingly, dismissed. 18. Ground No. 3 relates to the restricting of disallowance of Rs. 12,71,063/- to 20%. 19. Facts on record show that the assessee has claimed expenses of Rs. 12,71,063/- towards business promotion. The Assessing Officer observed that these expenses were claimed to be paid through credit cards of the Directors. According to the Assessing Officer, element of personal expenses cannot be ruled out and, therefore, the Assessing Officer disallowed the entire amount of Rs. 12,71,063/-. 20. The assessee strongly agitated the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of the ld. CIT(A). 30. After giving thoughtful consideration, we are of the considered view that if the Assessing Officer had any doubt in his mind, he could have very well brought on record some adverse material by conducting enquiry u/s 133(6) of the Act. In the absence of any adverse material brought on record, we decline to interfere with the findings of the ld. CIT(A). Ground No. 4 is dismissed. 31. Ground No. 5 relates to the deletion of addition of Rs. 11,71,69,678/- disallowed by the Assessing Officer on account of unexplained purchases. 32. While scrutinizing the financials of the assessee, the Assessing Officer noticed that the assessee has made purchases during the year from the following parties: 33. The Assessing Officer issued notice u/s 133(6) of the Act for verification of the purchases. On receiving no plausible reply from the aforementioned parties, the Assessing Officer treated the purchases as unexplained and made addition of Rs. 11,71,69,678/-. 34. Before the ld. CIT(A), the assessee explained that due to controversy surrounding Common Wealth Games, all the parties became hostile and stopped responding to the statutory noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as purchased fence of Rs. 4,53,55,648/- which was sold as scrap at Rs. 1,03,35,511/-. The Assessing Officer made a weird addition taking scarp at Rs. 73,27,511/- and deducted the same with the scrap value of the fence at Rs. 1,36,06,694/- and made addition of Rs. 62,79,183/-. 48. The assessee carried the matter before the ld. CIT(A) but without any success. 49. Before us, the ld. counsel for the assessee vehemently stated that because of the controversy surrounded around the Common Wealth Games, once the games were over, several enquiries were initiated against the Organizing Committee and participating contractors. Because of the Government enquiries, there were hardly any buyers for the scrap materials. 50. It is the say of the ld. counsel for the assessee that there was a time limit for removing the goods from the venue, failing which severe penalties were to be imposed. Therefore, on account of distress sales, the assessee was left with no choice but to accept whatever scrap value was received. 51. Though the ld. DR relied upon the findings of the Assessing Officer /ld. CIT(A), but could not controvert the submissions made by the ld. counsel for the assessee. 52. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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