2013 (11) TMI 414

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ome. The AO, however, observed that payment had been received this year and, therefore, this has to be treated as part of income and accordingly added the sum of Rs. 36, 04,904/- in the total income, on the ground that if this amount was excluded from the sundry debtors, the asset side in the balance sheet will be more than the liability side by that amount. 2.1 The assessee disputed the decision of AO and submitted before CIT (A) that the assessee was following mercantile system of accounting consistently and the amounts received against display charges had been shown in the books as advance and the sale is shown only on actual execution of the hoarding display at various sites. The amount received was only in respect of the advances received in the month of March in respect of which actual hoarding display was done after 31st march 2007 and the income was declared in the next year. The details were given as under:- Bill No. Date Party Display Period Amount B-33-3-07 29.3.2007 Oglivy Mather Pvt. Ltd Bangalore 5.4.2007 to 4.5.2007 477020 144-03- 07/H 14.3.2007 Jagaran Engage Mumbai 1.4.2007 to 30.4.2007 1414224 P-60-03-07 6.3.20....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....be shown on liability side though not as part of the creditors and, therefore, in our view there will be no difference in the balance sheet figures on asset and liability side. The addition made is not proper. We see no infirmity in the order of CIT (A) in deleting the addition and the same is therefore upheld. 4. The second dispute is regarding addition on account of cash expenditure. The AO on examination of cash memos noted that the assessee had made two payments i.e. 2, 80,000/- and fifty thousand any cash which exceeded Rs.20 thousand in each case. The Assessing Officer also noted that the assessee had claimed expenses of Rs.9,166/-, Rs. 4,680/-, and Rs.1,23,074/-, aggregating to Rs.1,36,920/- pertaining to the previous year which according to him was not allowable. As regards the cash expenses. The AO also observed that the assessee explained that there was no violation of section 40 A(3) and, therefore, the AO treated the cash payments of Rs. 3,35,000/-(wrongly mentioned as Rs. 1,55,000/- in the order) as made outside books of accounts. The AO thus, made total addition of Rs.4,71,920/- (wrongly mentioned as 2,91,920/-) i.e. Rs. 3,35,000+1,36,920. 4.1 The assessee dispu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....g for display at Cricket Match held on 6.04.2006 and, therefore, in our view, the expenditure had been rightly considered by CIT (A) for Assessment year 2007-08 in which corresponding income was declared by the assessee. We, therefore, see no infirmity in the order of CIT (A) in restricting the addition to only Rs. 80,846/- in place of Rs. 4,71,920/- made by the AO. 6. The third dispute is regarding disallowance of various expenses made by AO on estimate on the ground that the expenses were not supported by bills and vouchers. The claim of expenses and disallowance made by AO under different heads are given in the table below:- Head of Exp. Claimed Disallowed Telephone Expenses 4,42,353 1,50,000 Travelling Expenses 5,12,793.50 2,00,000 Commission (No evidence of work has also been produced) 34,82,398 17,00,000 Digital Print Exp. 7,01,121 1,00,000 Electricity 1,30,997 70,000 Hotel Exp. 1,12,166.50 53,911 Professional Fees 3,62,222 1,00,000 Repairs and Maintenance 16,68,134 2,50,000 Sales promotion 44,180 20,000 Site Exp. 53,29,784 10,00,000 Sundry Exp. 52,162 25,000 Offi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Rs.10,00,000/-. He, therefore, held that considering the facts and circumstances of the case, disallowance at the rate of 5% i.e. Rs. 2,66,489/- would be justified. 6.3 The AO had also disallowed Rs.70,000/- out of electricity expenses. The assessee submitted that expenses were incurred exclusively for business and there was no personal expenditure involved and considering the volume of business the expenses were reasonable. CIT (A) agreed that electric consumption was normal and deleted the addition. Similarly, the AO had also disallowed a sum of Rs.1,00,000/- from professional fees. The assessee submitted that the fees paid was genuine. It was paid to consultants, advocates and architects and in respect of all payments tax had been deducted at source. CIT (A) agreed that there was no justification for disallowance of professional fees and accordingly deleted the addition. 7. The revenue has disputed the decision of CIT (A) to delete/restrict the disallowance in relation to telephone expenses, travelling expenses, commission expenses, digital print expenses, professional expenses, repair and maintenance expenses and site expenses. 8. Before us, the learned AR for the ass....