2015 (10) TMI 7

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.... expenses; and b) disallowance of part of sale promotion expenses. 3. The facts relating to the case are stated in brief. The assessee is a proprietor of M/s P.K.Marketing, and was carrying the business of whole sale trading in the beer. He filed return of income declaring total income at Rs. 19,88,530/-. During the course of assessment proceedings, the AO noticed that the assessee has incurred a sum of Rs. 9,95,524/- towards sales promotion which consists mainly of expenditures incurred on account of gift articles. The assessee submitted that the gift articles were distributed to his clients i.e. retails purchasers. The AO asked the assessee to substantiate the claim that the gift articles were fully distributed amongst the clients of th....

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....at the gift articles purchased by him were actually distributed to its customers. The AO has also pointed out that the assessee has not maintain any register/record to substantiate the claim of distribution. We notice that the ld CIT(A) has not addressed this issue. However, distribution of gift articles to the local retailers are prevailing trade practice. Under these circumstances, we are of the view that this may ends of justice if the disallowance is restricted to 50,000/-. Accordingly, we modify the order of ld. CIT(A) and direct the AO to restrict disallowance to Rs. 50,000/-. 5. The next issue relates to addition of marriage expenses u/s 69C of the Act. We notice that the AO has made impugned estimate without specifying the basis on....

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.... explanation offered by the assessee about the source of such expenditure is not found satisfactory by the AO, the amount may be added to his income. In the present case, there is nothing to show that the expenditure was in fact incurred by the assessee. The assessee had denied having incurred the expenditure and had contended that it did not have that kind of money. The Tribunal noted that the AO had not made any enquiry whatsoever to find out whether such expenditure was directly incurred by the assessee. Since a part of the expenditure related to advertisement a newspaper, it could have been easily verified by the AO, but he did not do so. There is no fault in the view taken by the Tribunal that there is nothing on record to show that th....

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....e assessee has given the head-wise details of the said expenditure but AO while examining the said explanation has considered the report of the Inspector filed before him as a result of enquiry conducted by him under s. 133A(5), wherein, he has detailed the names of various persons who alleged to have performed the various functions that are taken by the assessee while celebrating the marriage of his daughter, given their names item-wise. But nowhere in the said report, it was stated by him that he has enquired from any of those persons nor he recorded their statements. He estimated merely on his assumptions and presumptions of the probable expenditure that ought to have been incurred by the assessee for celebrating the marriage of his daug....