Tribunal rules for Revenue on turnover expenses, dismisses exhibition costs. Assessee's Cross Objection rejected.

The Tribunal partially allowed the Revenue's appeal by directing the Assessing Officer to adopt 2.5% of the total turnover towards inflated expenses, while dismissing the appeal concerning the deletion of disallowance of exhibition expenses. The Cross Objection filed by the assessee was deemed infructuous and dismissed.

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Issues:
1. Deletion of disallowance of exhibition expenses
2. Deletion of addition of 5% to the total turnover

Deletion of addition of 5% to the total turnover:
The appeal by the Revenue challenged the deletion of an addition of &8377;6,15,26,406 made at the rate of 5% to the total turnover for the assessment year 2014-15. The Assessing Officer noted a decrease in profit percentage compared to the previous year and concluded that the expenses were inflated. The Assessing Officer estimated the gross profit at 5% of the turnover and added it to the total income. The CIT(A) deleted the addition. The Tribunal found a variation in profits declared by the assessee for the two years and directed the Assessing Officer to adopt 2.5% of the total turnover towards inflated expenses, partially allowing the Revenue's ground.

Deletion of disallowance of exhibition expenses:
The Revenue appealed the deletion of disallowance of exhibition expenses amounting to &8377;25,78,256. The Assessing Officer argued that these expenses were capital in nature due to enduring benefits from exhibitions. The CIT(A) held them as revenue expenses. The Revenue contended that the benefits were enduring. The assessee cited legal precedents supporting the revenue nature of such expenses. The Tribunal, following previous decisions, determined that exhibition expenses are revenue in nature, dismissing the Revenue's ground.

Conclusion:
The Tribunal partly allowed the Revenue's appeal regarding the addition to the total turnover and dismissed the appeal concerning the exhibition expenses. The Cross Objection filed by the assessee was deemed infructuous and dismissed. The appeal by the Revenue was partly allowed for statistical purposes, and the Cross Objection by the assessee was dismissed.

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