TaxTMI 
TaxTMI 
2015 (10) TMI 1381
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....blications Pvt. Ltd. is engaged in the business of publication of a vernacular daily newspaper by name "Surya". The assessee filed its original return of income for A.Y. 2009-10 on 29.9.2009 declaring a loss of Rs. 3,27,14,445. The return was processed u/s. 143(3) r.w.s. 144 of Income-tax Act, 1961. The AO passed an ex-parte order u/s. 144 and determined the income at Rs. 4,16,23,519. The AO disallowed an amount of Rs. 5,55,31,298 out of expenditure claim. Further, the AO made disallowance u/s. 40(a)(ia) of the Act amounting to Rs. 2,89,05,040. The AO also disallowed depreciation of Rs. 46,14,443. Aggrieved the assessee preferred appeal before the CIT(A). 3. The first issue before the CIT(A) was with respect to disallowance made by the A....
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....ding year to Rs. 71 crores in the current year, the consumption of material had increased from Rs. 16 crores to Rs. 44 crores in the same period. The AO held that the increase in material consumption was disproportionately high and could not be explained merely as a result of price fluctuation. The AO, therefore, disallowed the claim of material consumption on the following basis: Gross revenue for FY 2007-08 (A) Rs. 34,63,64,919 Gross revenue for FY 2008-09 (B) Rs. 71,04,78,996 Material consumption for FY 2007-08 (C) Rs. 16,03,82,275 Material consumption for FY 2008-09 C*B/A Rs. 32,89,83,195 Add: 20% for price fluctuation Rs. 6,57,96,639 Total Rs. 39,47,79,834 Excess over assessee's claim of Rs. ....
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.... revenue should not be taken into consideration for analysis of its reasonability by the AO. The CIT(A) pointed out that as per the data submitted by the assessee, the increase in material consumption is commensurate with the increase in circulation revenue and held that explanation of the AR is reasonable. The CIT(A) allowed the expenditure incurred for material consumed. The CIT(A) partly allowed the appeal of the assessee. 8. Aggrieved, the assessee preferred appeal before the Tribunal. 9. The assessee raised additional grounds before us. However, at the time of hearing he stated that the additional grounds shall be withdrawn by him. 10. Ground No. 1 is general in nature and needs no adjudication. 11. The next ground is on th....
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....expenses and (2) distribution charges and, therefore, we remit the issue of disallowance of expenditure in respect of the above three items to the file of the CIT(A) with a direction to adjudicate upon these items in the light of the evidences produced by the assessee before him, and decide in accordance with law. 14. In the result, appeal of the assessee is allowed for statistical purposes. 15. Now we will adjudicate upon the Departmental appeal in ITA No. 665/Hyd/2013. The Department raised the following grounds of appeal: (a) The learned CIT(A) erred both in law and on facts of the case. (b) The learned CIT(A) ought not have given relief without verifying the genuineness of the expenditur....