Tribunal allows appeals for 3 assessment years, citing denial of natural justice & unjustified disallowances.

The Tribunal partly allowed the appeals filed by the assessee for Assessment Years 2012-13, 2013-14, and 2014-15. The Tribunal held that the ex-parte order passed by the CIT(A) was a denial of natural justice. It deleted the ad-hoc disallowance of credit card and foreign travel expenses, finding them unjustified. The disallowance of brokerage expenses was also deleted as genuine business expenditures. Sales tax incentives were treated as capital receipts and excluded from book profit computation under Section 115JB, following judicial precedents. Other general and consequential grounds raised were not specifically adjudicated upon.

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Issues Involved:

1. Ex-parte order passed by CIT(A).
2. Ad-hoc disallowance of credit card expenses.
3. Ad-hoc disallowance of foreign travel expenses.
4. Disallowance of brokerage expenses.
5. Treatment of sales tax incentive as capital receipt.
6. Exclusion of sales tax incentive from book profit under Section 115JB.
7. Other general and consequential grounds.

Summary of Judgment:

1. Ex-parte Order Passed by CIT(A):
The appellant contended that the CIT(A) passed an ex-parte order under Section 250 without considering the adjournment petition filed by the assessee. The Tribunal noted that the CIT(A) ignored the adjournment petition and concluded that passing the ex-parte order was a complete denial of natural justice.

2. Ad-hoc Disallowance of Credit Card Expenses:
The Tribunal addressed the ad-hoc disallowance of 10% on credit card expenses for the Assessment Years (AY) 2012-13, 2013-14, and 2014-15. The Tribunal found that the disallowance was based on conjectures and surmises without pointing out specific defects in the expenditure details provided by the assessee. The Tribunal deleted the disallowance, holding it to be unjustified.

3. Ad-hoc Disallowance of Foreign Travel Expenses:
Similarly, the Tribunal dealt with the ad-hoc disallowance of 10% on foreign travel expenses for the same assessment years. The Tribunal found that the disallowance was also ad-hoc in nature and deleted it, following the same rationale as for the credit card expenses.

4. Disallowance of Brokerage Expenses:
For AY 2014-15, the Tribunal considered the disallowance of brokerage expenses amounting to Rs. 8,78,771/-. The Tribunal found that the brokerage expenses were genuine business expenditures, accounted for and settled during the year with tax deducted at source. The Tribunal deleted the disallowance, allowing the ground raised by the assessee.

5. Treatment of Sales Tax Incentive as Capital Receipt:
The Tribunal admitted additional grounds regarding the sales tax incentive being treated as a capital receipt. The Tribunal referred to various judicial pronouncements, including the Hon'ble Supreme Court and jurisdictional High Court decisions, and concluded that the sales tax incentive received under the West Bengal Industrial Promotion Scheme was a capital receipt, not liable to tax. The Tribunal allowed the additional grounds for AY 2012-13, 2013-14, and 2014-15.

6. Exclusion of Sales Tax Incentive from Book Profit under Section 115JB:
The Tribunal addressed whether the sales tax incentive should be excluded from book profit computation under Section 115JB. Citing judgments from the Hon'ble Jurisdictional High Court and other precedents, the Tribunal held that the sales tax incentive, being a capital receipt, should not be included in the book profit for computing tax liability under Section 115JB. The Tribunal allowed the additional grounds for AY 2012-13, 2013-14, and 2014-15.

7. Other General and Consequential Grounds:
The Tribunal noted that other grounds raised by the assessee were general and consequential in nature, requiring no specific adjudication.

Conclusion:
The appeals filed by the assessee for AY 2012-13, 2013-14, and 2014-15 were partly allowed by the Tribunal.

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