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TMI Blog2024 (6) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... y and that the assessee has not discharge the onus that the expenditure is incurred with a view bring profit or monetary advantage - HELD THAT:- From the perusal of statement of accounts we notice that the assessee has declared substantial revenue from operations and has incurred expenses various expenses for the purpose of business which have been accepted by the AO. AO has not rejected the books of accounts of the assessee. Given the volume of business of the assessee, in our considered view without recording any adverse finding the AO is not correct in making the disallowance of the entire food expenses stating that the same is not incurred for the purpose of business. According to the ld AR the fact that the assessee has made payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tio to assessee's case, we are of the considered view that the AO is not correct in making the addition under section 41(1) of an acknowledged liability of the assessee. Accordingly, we direct the AO to delete the addition. Appeal of the assessee is allowed. - SHRI NARENDER KUMAR CHOUDHRY, JM MS PADMAVATHY S, AM For the Appellant : Ms. Dinkle Hariya a/w Ms. Rashmi Vyas, CA For the Respondent : Shri P.D. Chougule, Sr. DR ORDER Per Padmavathy S, AM: 1. This appeal is against the order of Commissioner of Income Tax, Appeals, / National Faceless Appeal Centre [in short the CIT(A) ] dated 06.07.2023 for the AY 2013-14. The assessee has raised the following grounds: I a) The learned Commissioner of Income-tax (Appeals) erred in confirming d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by deleting the addition made under section 14A and confirmed the disallowance of Business Promotion Expenses and addition under section 41(1). 4. Aggrieved the assessee is in appeal before the Tribunal. Disallowance of Business Promotion Expenses 5. During the year under consideration, the assessee has claimed a sum of Rs. 15,66,719/- as Business Promotion Expenses. The AO during the course of assessment called on the assessee to furnish the details of the said expenses. On perusal of the bills the AO noticed that an amount of Rs. 8,67,047/- was incurred for food provided for 250 people . The assessee submitted before the AO that during the year the assessee had organized a get-together function of the business associates and the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the AO has allowed the claim of accommodation expenses incurred by the assessee towards the hotel stay of foreign suppliers. The ld. AR also drew our attention to the fact that the assessee made the payment towards lunch expenses to M/s Catering Allied by an A/c Payee cheque and tax under section 194C is duly deducted on the same. The ld. AR submitted that given the volume of business and the customer base of the assessee, the AO is not correct in disallowing the lunch expenses for the reason that there is no justification for arranging lunch for 250 persons. The ld. AR also relied on certain judicial pronouncement in this regard. 7. The ld. DR on the other hand relied on the order of the lower authorities. 8. We have heard the parties a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me down for the purpose of the get-together. From the perusal of statement of accounts we notice that the assessee has declared substantial revenue from operations and has incurred expenses various expenses for the purpose of business which have been accepted by the AO i.e. The AO has not rejected the books of accounts of the assessee. Given the volume of business of the assessee, in our considered view without recording any adverse finding the AO is not correct in making the disallowance of the entire food expenses stating that the same is not incurred for the purpose of business. According to the ld AR the fact that the assessee has made payment to the caterer after deducting tax at source, also goes to substantiate the claim that the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely for the reason that the liability is barred by limitation. 12. The ld. DR on the other hand, relied on the order of the lower authorities stating that the assessee has not brought anything on record to show that there is an intention to settle the outstanding liability. 13. We have heard the parties and perused the material on record. The AO has made the addition under section 41(1) of an amount of Rs. 15,000/- reflected in the statement of accounts as amount outstanding in the name of M/s Parul Shah and Co. towards professional fees payable to them. The reason for the AO to make the addition is that the liability is outstanding for more than three years and that the assessee has not brought anything on record to show that there is any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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