Assessee's appeal on Sales Promotion Expenses denied due to lack of proof. CIT(A) decision upheld.

The appeal by the assessee against the order confirming the addition of Rs. 25,87,143/- towards Sales Promotion Expenses for the assessment year 2018-19 was dismissed. The lack of proof of commercial expediency and failure to establish a link between the expenditure and business purpose led to the denial of the deduction. Concerns were raised regarding potential personal use of Gold articles purchased. The decision of the CIT(A) was upheld, and the appeal was dismissed by the court on 13th June 2023.

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Issues involved: Confirmation of addition towards Sales Promotion Expenses.

Summary:
The appeal by the assessee was against the order passed by the CIT(A) in relation to the assessment year 2018-19, confirming the addition of Rs. 25,87,143/- towards Sales Promotion Expenses.

The assessee claimed deduction for the purchase of Gold articles but did not provide details of the recipients of such items, citing confidentiality reasons. The authorities found that the commercial expediency was not proved as the assessee failed to establish a link between the expenditure and the business purpose. The lack of recipient details raised concerns that the gold items may have been used for personal purposes by the Directors. As a result, the deduction was not granted, and the view taken by the CIT(A) was affirmed.

The appeal was dismissed, and the order was pronounced in the Open Court on 13th June, 2023.

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