TaxTMI 
TaxTMI 
2016 (3) TMI 547
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....ce u/s.143(2) of the Act was issued. In compliance to notice, the assessee's ld. Authorised Representative appeared from time to time and furnished details and assessment was completed. The ld. Assessing Officer on perusal of final accounts found that the assessee has claimed expenditure under import and export headings and assessee filed separate profit and loss account in respect of two departments wherein the assessee as an agent maintained receipts and payments of import and export of goods. Subsequently, the profits from each department transferred to Profit and Loss account. The ld. Authorised Representative explained that the assessee has been incurring expenditure to expedite work at the customs, harbor and the port area and payments are made to various persons and produced vouchers in support of the payments. These payments are in nature of speed money to some persons for working expeditiously and the characteristic of the expenses is a hidden and are generally incurred to edge over the competitors to get benefits. The expenditure incurred by the assessee cannot enlightened openly because of its character but have been incurred by the assessee wholly and exclusively for th....
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....n of Rs. 48,80,686/- which takes the nature of illegal money or speed money and the assessee could not prove expenditure was wholly and exclusively for the purpose of business and relied on the judicial decisions. The ld. Departmental Representative accepted that it is a common practice to incur such speed money and which is in violation of public policy and cannot be considered as wholly and exclusively incurred for the purpose of business. 3.2 Contra, the ld. Authorised Representative reiterated his submissions made before the lower authorities and drew attention to page nos.4 to 6 of paper book explaining the expenditure incurred by the assessee and characteristic of expenditure and the Department has accepted expenditure in earlier years. 3.3 We heard the rival submissions and perused the material on record and judicial decisions cited. We are of the opinion that the expenditure is incurred as a regular practice in the business of forwarding and clearing agencies at Dock and Ports for loading and unloading of goods and claimed as General and Miscellaneous expenses necessarily for the purpose of conducting business. The Revenue has accepted 15% disallowance in the earlier ....
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....he ground that assessee could not substantiate with evidence and there is no nexus between business and associations. 5.2 The ld. Commissioner of Income Tax (Appeals) relied on the judicial decisions and submissions of the ld. Authorised Representative that the expenditure of membership is necessary which enable the assessee to improve business prospects. Such membership subscription also educate on business policies and trade delegations indirectly to improve business universally and deleted the addition. 5.3 Before us, the ld. Departmental Representative argued that there is no nexus or advantage derived which assessee firm could establish. 5.4 On the other hand, the ld. Authorised Representative drew our attention to page no.16 of paper book containing the list of associations and payments in foreign currency related to the business of the assessee. 5.5 We after hearing the rival submissions and perusal of subscriptions details paid to the Associations for improving business prospects in domestic and international markets and also participation fees paid to various seminars and conference and we confirm the order of Commissioner of Income Tax (Appeals) in deleting th....
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....he amount could have been utilized for personal purpose and disallowed 50% of foreign travel expenses of Rs. 9,50,000/-. 7.2 The ld. Commissioner of Income Tax (Appeals) on perusal of expenditure on domestic and foreign travel by Managing Partner, Senior employees and Staff and purpose of visit and corresponding invoices and considered the comments of the ld. Authorised Representative on remand report found such travel expenses incurred by Managing Partner and Senior Managers only and not any of their family members and deleted the addition. 7.3 Before us, the Revenue has reiterated that assessee has not produced this evidence in the assessment proceeding before the Assessing Officer which could not be examined and contested the submissions of fresh evidence. 7.4 The ld. Authorised Representative referred to page no.55 of paper book containing the list of travelled Countries made by the persons alongwith purpose and details of travel and invoices. 7.5 After hearing both the parties, we are of the opinion that the expenditure incurred if it is supported by evidence the same to be allowed. Hence, we remit the issue to the file of the Assessing Officer to verify the genuin....
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....f the parties to whom money was advanced. 8.5 We after hearing the submissions, found that assessee could not submit these details in the assessment proceedings and also not demonstrated with fund flow statement to prove that there are adequate funds available with the firm. Therefore, we set aside the disputed issue to the file of the Assessing Officer who shall verify fund flow statement based on the capital account and balance sheet of the firm and allow deduction after examination. This ground of the Department is partly allowed for statistical purpose. 9. The last ground raised by the Department with regard to deletion of addition of Rs. 2,98,71,222/- made by the Assessing Officer on account of difference in receipts as per clients account. 9.1 The Assessing Officer issued letters u/s.133(6) of the Act to leading clients of the assessee to reconcile and confirm the income from the assessee firm on each transaction. In compliance to letters, four major clients filed confirmation and ld. Assessing Officer on comparison the balance with the receipts accounted in the assessee's books of account found that the assessee has excluded receipts to the extent of Rs. 3,51,42,613....
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....lients and the nature of expenditure and accounting treatment which the Assessing Officer was denied the opportunity of verification in the assessment proceedings. Therefore, we remit this issue to the file of the Assessing Officer for verification and examination. The Assessing Officer shall pass the order on merits after providing opportunity of being heard and in accordance with law. This ground of the Department is partly allowed for statistical purpose. 10. In the result, the appeal of the Department in ITA No.93/Mds/2011 is partly allowed for statistical purpose. 11. We take up the assessee appeal in ITA No.2209/Mds/2010:- The first ground raised by the assessee with regard to addition of Rs. 67,73,600/- payable to Madras Port Trust. 11.1 At the time of assessment proceedings, the ld. Authorised Representative submitted and explained that the Port Trust has enhanced charges from 1994-2000 pertaining to container storages charges levied by the Madras Port Trust and was challenged before Jurisdictional High Court and stay was granted. The Hon'ble High Court has directed Port Trust to collect charges as per revised tariff dated 19.07.1995 prospectively from 22.11.2000. As ....