TaxTMI 
TaxTMI 
2015 (1) TMI 914
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....hearing." Grounds in Cross Objection "1. The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming disallowance of Rs. 61,783/- incurred on foreign travelling expenditure of director's employees by holding that the employee's are director's wives who travelled with the directors due to their personal relations. 2. The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming ad hoc disallowance out of various expenditures as under:- Staff welfare Expenses Rs. 19,038/- Show Room Expenses Rs. 72,378/- Business Promotion Expenses Rs. 42,361/- Repair & Maintenance Expenses Rs.1,25,000 /- 3. The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming disallowance of Rs. 58,315/- out of depreciation on vehicles by holding that the vehicles are not allowed to be used without insurance which was done after the end of the year ignoring that the vehicles were registered by RTO as on 31/3/2008 and thus were used during the year. 4. The learned Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming disallowance of Rs. 11,200/- out of payment of Rs. 55,105/- ....
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....bills and vouchers related to repair and maintenance expenses. Therefore, he presumed that the entire expenses were not related to the business activities of the assessee company. Thus, a lump sum disallowance of Rs. 2,02,102/- being 10% was disallowed and added to the total income of the assessee. Further the Assessing Officer verified the incentive and remuneration paid to the customers, which had been debited in total at Rs. 23,85,961/- in P&L account. On verification of detail, the learned Assessing Officer found that an amount of Rs. 11,07,092/- had been claimed as paid to the customers, Rs. 7,52,466/- had been debited as service tax expenses and Rs. 5,26,403/- had been paid to the employee. He further found that out of total incentive received from M/s Sundaram Finance Ltd., 7,89,279/- was paid to customers and Rs. 1,10,763/- had been paid against the service tax. However, in other cases, no such evidence was found. The finance company had decided its terms with the Assessee Company and customers mutually. The Assessing Officer treated the assessee as a facilitator in this case, intends to give any further benefit over and above the benefit being given by the finance company....
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....the assessee is in C.O. before us. The learned D.R. vehemently supported the order of the Assessing Officer and argued that the expenses incurred by the assessee either in cash was not supported with proper bills or vouchers, therefore, he prayed to confirm the order of the learned Assessing Officer. 5. At the outset, the learned A.R. for the assessee submitted that expenditure incurred is wholly and exclusively for the purpose of the business and duly supported with proper supportings and bills. The nature of these expenses are such that pakka bills are not possible and few payments are to be made in cash. However, payment in cash does not mean that the expenses are not genuine. Each cash payment is supported by the signature of the recipient on the vouchers. Hence, simply because the payment is in cash no adverse inference is called for. The expenses are reasonable considering the volume of business of the assessee. The lower authorities have not pointed out any specific payment which is not verifiable. It is not the case of the lower authorities that expenses are inflated or fake. Thus, expenses are fully verifiable. In respect of few instances of expenditure of Rs. 64,980/- u....
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....ssessment proceedings, assessee has furnished the finance/bank wise details of the gross commission received & incentive/service tax paid. In respect of service tax paid, complete details were furnished which was accepted by the AO. In case of incentive given to the customers/employees, sample copy of the customer ledger account, copy of invoice, customer payment details, letter from the finance company containing details of the amount passed on to customers in respect of finance through Sundram Finance Ltd. , SBI , ICICI Bank & HDFC Bank was filed. The learned AO accepted the incentive passed on to the customer in respect of finance through Sundaram Finance Ltd. but without any basis ignored the similar incentive passed on to the customer where finance is obtained from other banks. In case of incentive paid to the employees/adjusted in customer account against the Maruti Insurance Remuneration, sample vouchers were furnished where the detailed calculation of the incentive & its payment by cheque is indicative. The learned CIT(A), considering these evidences, have, therefore, rightly allowed the incentive passed on to the customers/employees in respect of other banks/insurance comp....
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....embers alongwith Shri Ram Bhatia and his family members on various dates. The expenses of Rs. 68,000/- and Rs. 1,04,814/- were incurred on foreign travelling of children and wives. The assessee failed to justify such foreign travelling for business purposes, therefore, he held that the expenses of Rs. 1,73,613/- was not incurred wholly and exclusively for business purposes. The learned CIT(A) verified the expenditure, which was found at Rs. 1,66,598/- in place of Rs. 1,73,613/- and held that none of the employee other than the family members of directors went on tour to China and Athens and travelled for their personal relation not as an employee of the company. Accordingly, he held personal expenditure incurred by the company. He confirmed the addition of Rs. 1,04,814/- and deleted the balance addition of Rs. 68,799/-. The learned AR argued that salaries of Smt. Jaya Bhatia and Smt. Shalini Bhatia were allowed by the learned Assessing Officer as employees. This itself establishes that although they were director's wives but they were working in their capacity as an employee of the company and therefore the expenditure incurred on their foreign travelling is necessarily and exclus....
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....incurred these expenses on staff welfare, which are required to maintain the cordial relation with the staff, so that the company's target can be achieved. We find that these expenses were incurred wholly and exclusively for the business purposes, therefore we delete the addition confirmed by the learned CIT(A) on this ground. Accordingly, this ground of assessee's C.O. is allowed. 9. The third ground of assessee's C.O. is against disallowance of Rs. 58,315/- out of depreciation on vehicles by holding that the vehicles are not allowed to be used without insurance, which was done after the end of the year ignoring that the vehicles were registered by the RTO as on 31/3/2008. The learned Assessing Officer observed that the assessee had claimed depreciation on Demo motor car for Rs. 8,03,951/-. During the year, the assessee added Alto of Rs. 2,51,400/-, Swift of Rs. 7,16,983/- and Wagon-R of Rs. 3,79,209/- in this list of assets on 31/3/2008, which was the last day of financial year. The R.C. of Wagon- R and Alto had been issued on 31/3/2008 and insurance was taken on 2/4/2008. It has been held by the Assessing Officer that uninsured motor vehicles cannot be used for the purpose of t....