2015 (10) TMI 931

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....a company which is engaged in the business of manufacturing of various stationery items. The return of income for the year under consideration was filed by it on 30/09/2008 declaring total income of Rs. 63,55,570/-. 4. During the course of assessment proceedings, it was noticed by the AO that the assessee has debited various expenses to the profit and loss account for the year under consideration which were substantially higher than the expenses claimed in the earlier two years as given here under: Sr. No. Particulars A.Yr.2008-09 A.Yr.2007-08 A.Yr.2006-07 1. Office expenses 34,22,491 31,68,219 6,60,717 2. Factory expenses 37,34,407 33,19,362 13,10,845 3. Travelling & conveyance expenses....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... 37,34,407/- claimed by the assessee. Accordingly, a sum of Rs. 14,48,031/- (37,34,407/--22,86,376/-) is hereby disallowed. iii) Travelling & Conveyance Expenditure The assessee has offered no explanation for the increase in the expenditure on account of travelling & conveyance expenditure. Thereby on basis of A.Y.2007-08, 20% of travelling of travelling & conveyance expenditure is hereby disallowed. Accordingly, a sum of Rs. 10,63,148/- is added back to the total income of the assessee. iv) Postage and telephone expenses The assessee has not offered any explanation for the reason for increase in the said expenses. Further, the expenses debited by the assessee are purely of cash in nature. Even if the percentage of increase in ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....events and how the same is related to the business of the assessee. Accordingly the expenditure incurred by way of sponsoring sports events is disallowed. The disallowance comes to Rs. 3,90,196/-. The claim of the expenditure incurred on Mahaprasad on pooja occasions at public worship is basically of religious nature and would not amount to advertisement expenses. Accordingly, the claim of expenses on account of Mahaprasad for Rs. 8,85,664/-. 6. Accordingly, a total disallowance of Rs. 42,11,983/- was made by the AO out of various expenses claimed by the assessee. On appeal, the ld. CIT(A) deleted the said disallowance made by the AO on the ground that there was not even single instance pointed out by the AO to show that any expenditu....