TaxTMI 
TaxTMI 
2011 (12) TMI 415
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....the Hon'ble CIT(A) has not appreciated the facts of the case and hence the disallowance is not justified. It be held so now and addition be deleted. (3) The Hon'ble CIT(A) has erred in confirming the disallowance of prior period expenses of Rs.54,27,086/- treating as if they were not crystallized during the year. Your appellant submits that CIT(A) did not appreciate the facts as to whether the liability is accrued during the year or not and hence disallowance made by him be deleted. It be held so now. (4) The Hon'ble CIT(A) has erred in confirming the disallowance of Rs.2,00,000/- out of disallowance of Rs.10,94,881/- made by the AO on ad hoc basis in case of following expenses: -Welfare expenses Rs.1001645 -Foreign Travel expenses Rs.93,236 Total Rs.1094881 3. The first ground of the appeal is general in nature which does not require any adjudication. 4. The second ground relates to confirmation of disallowance of Rs.2,32,645/- as per provisions of section 40A(3) of the Act. The brief facts of the case are that during the assessment proceedings the AO on verification of the statement attached with the return observed that a....
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....rd and find that there is no dispute about the fact that the assessee made payment in cash amounting to Rs.11,63,224/-. The tax auditor has also found that an amount of Rs.2,32,645/- being 20% of this amount was inadmissible under section 40A(3) of the Act. It is also not in dispute that the payments were not made to the Government within clause (b) of Rule 6DD and the cash payment exceeding Rs.20,000/- has been made by the assessee without any exceptional circumstances as mentioned in Rule 6DD. Hence the provisions of section 40A(3) are attracted in this case. Therefore, we are not inclined to interfere with the order passed by ld. CIT(A) and the same is hereby upheld. This ground of assessee is dismissed. 8. The third ground of the appeal relates to confirmation of disallowance of prior period expenses of Rs.54,27,076/-. During the course of assessment proceedings the AO observed that in tax audit report the assessee has claimed prior period expenses of Rs.54,27,076/-. When asked the assessee submitted that the expenses have been crystallized during the year as the debit notes raised by the parties have been received and accounted for during the year after settlement of....
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....details including mode of payment the AO disallowed 1/10 of these expenses amounting to Rs.10,01,645/-. The ld. CIT(A) after taking into consideration the submissions of the assessee that assessee being an artificial judicial persons there cannot be a nonbusiness purpose for incurring these expenses, restricted this addition to Rs.2,00,000/-. We are not inclined to interfere with this finding of ld. CT(A) and the order passed by him is hereby upheld. So this ground of assessee is also dismissed. In the result, appeal of assessee is partly allowed for statistical purposes. ITA No.715/Ahd/2009 Asst. Year 2002-03 (assessee's appeal): 11. In this appeal the assessee has raised following grounds:- (1) The order passed by the Hon'ble CIT(A) is bad in law, contrary to legal pronouncements and same be quashed. (2) The Hon'ble CIT(A) has erred in confirming the disallowance of Rs.1,26,987/- out of Employees' Welfare expenses, being amount paid to Shroff Foundation Trust. Your appellant had rightly claimed the same as per provisions of section 37(1) of the Act. Your appellant therefore submits that the same be allowed in full. (3) T....
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....he said expenditure as donation paid to charitable trust. The AO, therefore, disallowed the said expenses and added back this sum to the total income of the assessee. In appeal, this action of the AO was confirmed by the ld. CIT(A). Further aggrieved, the assessee is in appeal before us. 15. Following additional evidences as per paper book have been submitted for this ground and ground relating to disallowances u/s 14A:- Sl. No./Page Nos.as per index of the paper book Particulars/Remarks 4/54-67 Details of payments made to Shroffs Foundation Trust (copy of the ledger account and copies of invoices received, on sample basis) to substantiate that the payment was made for services availed of the medical centre run by the said trust and was not a donation to the said trust. 9/99-117 Copy of the long term contract between the company and M/s Transpek-Silox Industry Ltd.(TSIL) for sale of sulphur dioxide, oleum and steam to TSIL to substantiate that investment in the equity shares of TSIL was made for strategic business reasons. 10/118-124 Copy of the relevant extracts of the company's balance sheet for financial year 2000-01 during whic....
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....penses amounting to Rs.5,32,146/- on the ground that the expenses incurred for the visit of Shri A. G. Shroff were for nonbusiness purposes of the assessee. 1/10th of general expenses was also disallowed on the ground that most of the expenses were on cash basis and same were not fully verifiable. The ld. CIT(A), however, restricted this addition to Rs.3,00,000/- out of total disallowance of Rs.11,92,332/- taking into consideration that the nature of these expenses was such that element of non-business expenses could not be ruled out. 17. After hearing both the parties and perusing the record, we find no reason to interfere with the order passed by the ld. CIT(A) and the same is hereby upheld. Therefore, the ground of assessee and that of the Revenue both are dismissed. 18. Ground No.4 of assessee's appeal relates to disallowance of prior period expenses. The AO, during the course of assessment proceedings observed that in tax audit report the assessee has claimed prior period expenses of Rs.8,59,327/-. The assessee stated that the expenses have been crystallized during the year. In absence of details the AO disallowed the entire prior period expenses of Rs.8,59....