TaxTMI 
TaxTMI 
2017 (6) TMI 586
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....Company. For the AY 2007-08 they filed their return of income on 02.11.2007 declaring an income of Rs. 5,01,150/-. During the proceedings u/s 143(3) of the Act AO disallowed the expenditure and made the following additions: a) Supervision Charges Rs. 2,91,680/- b) Travelling expenses Rs. 3,70,215/- c) Car expenses Rs. 2,03,531/- d) Interest & Bank Charge Rs. 2,78,670/- e) Commission paid to Puneet Jhalani Rs. 75,000/- f) Consultancy Charges paid to Yogesh Jhalani Rs. 60,000/- Total Rs.12,79,096/- 3. Appeal preferred by the assessee was partly allowed. However, the Ld. CIT (A) sustained the addition made on disallowance of supervision charges, travelling expenses, car expenses and commis....
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....here is no loss to the Revenue. So far as the travelling expenses are concerned it is his submission that a lot many details are provided vide page nos. 174 & 175 of the PB giving details as to the name of the person who went abroad, purpose of visit and whether any business was generated or not. He also stated that vide page nos. 192 to 196 further details are given and in spite of this voluminous record produced, the authorities felt that not sufficient evidence was produced. Page No. 198 onwards contained the copies of invoices also. He placed reliance on the decision of the Jurisdictional High Court reported in Rahul J. & Company P. Ltd. vs. ITAT Revision Petition No. 668 of 2011 in ITA No. 157 of 2011 for the principle that the relatio....
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....t to the work done for the earlier year, was carried out and whatever the supervision activities in respect of which the assessee claimed expenditure, relate to the earlier assessment year only. AO further found that the bills were raised after two and half months and the details were different from those found at the time of processing in the month of 2006. AO further found that in respect of some cases the charges were reckoned on the basis of number of pieces and in respect of some on the basis of number of bags of kilograms and thus, held that there was no certainty of pattern for calculating the supervision charges. He further found that the expenses relating to the AY 2006-07 cannot be allowed as deduction for the AY 2007-08. It is on....
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....s. In the circumstances, we are of the considered opinion that the personal expenditure out of these two heads cannot be ruled out. However, having regard to the facts and circumstances of the case and the business needs of the assessee, we restrict the disallowance to 1/6th of the expenditure under the heads of travelling and vehicles. 7. Lastly coming to the commission on sales and consultancy charges paid to one Sh. Puneet Jhalani and Yogesh Jhalani, AO restricted the disallowance to 50%. On this aspect on a consideration of the amounts paid to these two persons over a period of time. As enumerated at page nos. 171 and 172 of the PB, we find that right from the year 2002-03 the assessee has been paying this commission and charges to t....