TaxTMI 
TaxTMI 
2013 (1) TMI 180
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....(A) has erred in deleting the addition of RS.16,64,599/- made by the AO on account of cash balance. 4. On the facts and in the circumstances of the case and in law the learned CIT(A) has erred in deleting the disallowance of Rs.66,25,9151- made by the AO out of business promotion expenditure as the assessee company failed to substantiate its claim of expenses. 5. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of appeal." 3. Brief facts of the case giving rise to this appeal are that the assessee filed the return declaring income of Rs.1,11,329/- and the same was selected for scrutiny. Consequently, notice u/s 143(2) of the Income Tax Act, 1961 (for short the Act) was served on the company. The Assessing Officer finalized the assessment with a total taxable income of Rs.21,71,830 by making some additions and disallowances. The assessee filed an appeal before the Commissioner of Income Tax(A) which was partly allowed. Now, the revenue is in appeal before us against the order of the Commissioner of Income Tax(A) on the above mention....
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....ervation takes care of clause (c) of sub-rule (1) of Rule 46A. The observation of the CIT (A) also takes care of sub-rule (2) under which he is required to record his reasons for admitting the additional evidence. Thus, the requirement of sub-rules (1) and (2) of Rule 46A have been complied with. However, sub-rule (3) which interdicts the CIT (A) from taking into account any evidence produced for the first time before him unless the Assessing Officer has had a reasonable opportunity of examining the evidence and rebut the same, has not been complied with. There is nothing in the order of the CIT (A) to show that the Assessing Officer was confronted with the confirmation letters received by the assessee from the customers who paid the amounts by cheques and asked for comments. Thus, the end result has been that additional evidence was admitted and accepted as genuine without the Assessing Officer furnishing his comments and without verification. Since this is an indispensable requirement, we are of the view that the Tribunal ought to have restored the matter to the CIT (A) with the direction to him to comply with sub-rule (3) of Rule 46A. In our opinion and with respect, the error c....
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....alty received from VLCC Health Care Limited for using its brand for running beauty and slimming centers. 8.2 The assessee has to promote and maintain its brand so that royalty income earned from the brand name can be maximized. The company has to incur certain expenses for carrying out day-to-day business besides some other expenses, which directly help in building the, brand name. These expenses include organizing events, traveling, advertisement etc. that helps in making the brand known to the masses. 8.3 As these expenses help in brand building, which is a regular process and benefits of the same accrue to the assessee for more than one year, the same are capital in nature. Thus such type of expenses which directly related to brand building were capitalized and depreciation was charged on them @25% as the said expenses were incurred to create a brand name which is the main asset of the company. The depreciation was charged @ 25% which is a residual category and includes all the other assets on which depreciation is chargeable if the same in not included in any category of specified rates. 8.4 The AO observed that ....
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.... the Brand and balance expenses of Rs.40,75,143 were disallowed. 9. The Commissioner of Income Tax(A) observed that the assessee submitted additional evidence pertaining to expenditure of Rs.16,09,348 and he granted relief to the assessee by allowing the same as expenditure incurred for the business. The Commissioner of Income Tax(A) directed the Assessing Officer to disallow depreciation on the amount of Rs.24,65,795. But the Assessing Officer did not allow any depreciation on disputed amount of expenditure and he disallowed the part of expenditure of Rs.40,75,143/- for which the assessee-appellant could not produce bills before the Assessing Officer. Since we have observed that the CIT(A) considered the additional evidence without following the procedure as stipulated in Rule 4CA(3) of the Rules and we have restored this issue to the file of CIT(A) for necessary compliance by allowing ground no.2 in favour of the Revenue, therefore the issue of verification of bills of Rs.16,09,348/- also deserves to be restored to the file of the CIT(A). 10. Before we part with the findings of ground no.1, we also observe that in para 8.6, 8.7 and 8.8, the ld. CIT(A) has given contradictor....
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....pugned order, the CIT(A) considered the observations and findings of the Assessing Officer with detailed written submissions of the assessee. The CIT(A) held that the appellant assessee has maintained books of accounts which were also considered by the Assessing Officer. The CIT(A) held that there was no trace of evidence to shows that the cash withdrawn from the bank has been utilized for either incurring any expenditure or acquiring any asset which were not recorded in the books and he deleted the addition with an observation that the addition merely based on suspicion cannot be upheld. 14. On careful consideration of the findings of the authorities below and the submissions before us, we observe that the DR did not dispute the fact that during the year under consideration, the total withdrawal of cash from the bank was of Rs.16,24,747 and opening cash balance at the beginning of the year was Rs. 1,70,856 and the closing cash balance at the end of the year was Rs.11,64,598. In this situation we decline to approve the finding of the Assessing Officer that the amount of cash withdrawals during the financial year be considered as assessee's unexplained expenditure which was not r....