TaxTMI 
TaxTMI 
2016 (10) TMI 91
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....n the circumstances of the case and in law, the Id. CIT(A) has erred in deleting the addition made by the Assessing Officer on account of discrepancy in expenditure incurred by the assessee under the head purchase, advertisement & legal expenses through M/s Carat Media Services India Pvt. Ltd. and M/s. Ogilvy & Mather P. Ltd., to the extent of Rs. 82,02,601/- and Rs. 71,67,764/-, respectively without appreciating the fact that the assessee failed to satisfactorily explain the same with supporting evidences. 2. The appellant prays that the order of the CIT(A) on the grounds be set aside and that of the Assessing Officer be restored." 3. The Brief facts of the case are that the assessee is engaged in the business of manufacturer of non-stick cook wares, pressure cookers and mixer grinders. The assessee has four manufacturing unit, three at Daman and one at Baddi in Himachal Pradesh. During the course of assessment proceedings u/s 143(3) read with Section 143(2) of the Act, it was observed by the A.O. that the assessee has claimed expenses on account of advertising, business promotion, legal expenses etc. paid to two concerns namely M/s Carat Media Services India Pvt. Ltd.....
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....vy &Mather Pvt. Ltd. Purchases Rs. 79,61,950/- Advertisement expenses Rs. 33,24,000/- Legal and professional fees Rs. 22,39,000/- Total Rs. 1,35,24,950/- The reply was received from the said concern O& M whereby the said concern O &M confirmed only the advertisement services during the financial year 2005-06 and the total amount billed was shown as Rs. 63,53,186/- and hence , the difference between the assessee's claim and the information received u/s 133(6) of the Act comes to Rs. 71,67,764/-. The assessee was asked to explain the same. The assessee has changed the items purchased from 'TV Commercial Advertisement' to just 'purchases'. Further to adjust the same the assessee has also increased the miscellaneous purchases. The said concern O & M has only confirmed payment for advertisement of the products of the assessee. The A.O. accordingly disallowed the difference of Rs. 71,67,764/- and added the same to the total income of the assessee vide assessment order dated 30-12-2008 u/s 143(3) of the Act passed by the AO. 5. Aggrieved by the assessment order dated 30-12-2008 passed by the AO u/s 143(3) of the Act, the assessee has filed its first....
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....d incurred Rs. 1,07,50,844/- and Rs. 33,24,000/- towards advertisement expenses payable to Carat Media Service Pvt. Ltd. and Oglivy & Mather Pvt. Ltd. respectively. The details of expenses also show that the assessee had incurred additionally an amount of Rs. 22,39,000/- towards legal and professional expenses payable to Oglivy & Mather Pvt. Ltd. Thus, the total expenses incurred through M/s Oglivy & Mather Pvt. Ltd. stood at Rs. 55,63,000/- and the A.O. has not disputed these figures. The ld. CIT(A) further observed that the details of purchases initially furnished to the A.O. showed an amount of Rs. 21,94,71,340/- and the revised details of purchases were also same and the same amount was debited to the P&L account which was also not disputed by the A.O. Similarly, there is no dispute with respect to the total value of credits in the accounts of two concerns which was claimed wrongly while submitting details of purchases. Thus, the ld. CIT(A) found that these credits representing Rs. 1,20,53,345/- and Rs. 79,61,950/- in the accounts of Carat Media Service Pvt. Ltd. and Oglivy & Mather Pvt. Ltd. respectively. The A.O. had considered advertisement expenses once Rs. 1,20,53,345/- as....
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....vy & Mather P. Ltd. which has not been substantiated by the assessee properly. The ld DR submitted that the assessee has not produced its books of accounts and purchase bills before the authorities below for verification. The ld. D.R. submitted that the ld. CIT(A) erred in allowing the appeal of the assessee without forwarding the matter to the AO for verification of the claim of the assessee and without asking assessee to produce books of accounts and purchase invoices for verification. For the purpose of verification, the matter may be sent back to the file of the A,O. 9. On the other hand, the ld. Counsel for the assessee submitted that notices u/s 133(6) were issued to the two parties i.e. M/s Carat Media Service Pvt. Ltd. and M/s Oglivy & Mather Pvt. Ltd. asking the details of the services rendered to the assessee , statement of account and other relevant details. The said concerns had given the replies directly to the AO but the same were not forwarded to the assessee for comments and hence the assessee is prejudiced by the use of such material collected by the AO at its back which was not confronted to the assessee before using the said material against the assessee. The ....