TaxTMI 
TaxTMI 
2017 (9) TMI 1584
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....0% of Venue Management expenses. 1.1 On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) erred in upholding the learned AO's action of disallowing 10% of the expenditure incurred on Venue Management expenses for want of verification on an adhoc basis without giving any cogent reason. The Appellants pray that the adhoc disallowance made by the learned AO on this count be deleted. 1.2 Without prejudice to the above, it is submitted that the disallowance made by the learned AO is excessive and without basis. 2. Disallowance of Rs. 7,10,046/-being 5% o(Venue expenses. 2.1 On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) erred holding the learned AO's action of disallowing 5% of the expenditure incurred on Venue expenses for want of verification on an adhoc basis without giving any cogent reason. The Appellants pray that the adhoc disallowance made by the learned AO on this count be deleted. 2.2 Without prejudice to the above, it is submitted that the disallowance made by the learned AO is excessive and without basis. 3. Disallowance of Rs. 11,14,055/- being 5% of Stage Decoration ex....
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....t of verification, vide assessment order dated 24-12-2008 passed u/s 143(3). Similarly, with respect to the stage decoration expenses incurred by the assessee, 10% of the expenses was disallowed in the preceding year. The assessee was asked to explain the same that why similar stand be not taken in this year and the AO proposed to disallow 10% of the expenses of Rs. 2,22,81,096/- claimed by the assessee as stage decoration expense in Profit and Loss Account .The assessee was asked by the AO to furnish complete details and explanations along with confirmation from two top parties under each head of expenses. It was submitted that in preceding year, no details were submitted and hence disallowance was made. The assessee furnished names and addresses of the parties along with confirmations of few parties only at fag end of the assessment, which could not be verified by the AO due to want of time keeping in view limitation for framing the assessment. The A.O. accordingly disallowed 5% of stage decoration expenses which comes to Rs. 11,14,055/-, vide assessment order dated 24-12-2008 passed u/s 143(3). Further, the assessee has claimed an expenditure of Rs. 41,32,370/- under the head ....
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....CIT(A) which are placed in paper book page 90-92 but still the disallowance was confirmed by the ld. CIT(A) on adhoc basis and he did not considered the contention of the assessee while dismissing appeal of the assessee. It is submitted that the Tribunal in assessee's own case for assessment year 2005-06 in ITA No. 4091/Mum/2009 dated 13th July, 2011 has upheld the disallowance to tune of 3% of the expenses incurred . The relevant portion of the order is reproduced below:- "Ground no 2 regarding disallowance of expenditure on account of venue management, venue expenses, professional fee and stage decoration expenses. 6.1 The Assessing Officer has disallowed 10% of the venue expenses, professional fee; stage decoration expenses incurred on the ground of non production of satisfactory documentary evidence. 6.2 On appeal, the CIT(A) has restricted the disallowance to 3% of the said expenses after considering the facts that for Assessment Year 2006-07 the Assessing Officer disallowed only 1% of the similar expenses. 7. We have considered the rival contention and perused the relevant material on record. When the assessee has produced the name and other particulars of the part....
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....d) and miscellaneous expenses (10% of expenses disallowed under this head) incurred by the assessee mainly because the assessee submitted details at the fag end of the assessment proceedings which was close to expiry of limitation period for framing of an assessment preventing verification and enquiry by the AO as also confirmations as sought by the AO were not submitted by the assessee. The learned CIT(A) has confirmed the additions as were made by the AO for the impugned assessment year and appeal of the assessee stood dismissed by learned CIT(A). Similar additions were made in the preceding assessment year i.e. 2005-06 by the AO at higher rates was made in impugned assessment year under consideration before us. The Tribunal vide its order dated 13-07-2011 in ITA no. 4091/Mum/2009 for assessment year 2005-06 on similar issue's upheld the disallowance to the extent of 3% of the expenses in the hands of the assessee, by holding as under: "Ground no 2 regarding disallowance of expenditure on account of venue management, venue expenses, professional fee and stage decoration expenses. 6.1 The Assessing Officer has disallowed 10% of the venue expenses, professional fee; stage deco....
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.... of the appellant company had been taken over by a new company namely Times Innovative Ltd. In the assessment for A.Y.2006-07, the A.O. has disallowed only 1% of the similar expenses. 8.3 I have considered the issue. Considering the above submission and considering the nature of expenses and the nature of activities of the appellant company, the disallowances made by the AO are on the higher side. The AO is, accordingly, directed to disallow 3% of the above expenses and allow the balance expenses as under:- Nature of expenses Total expenditure disallowed by the A.O. Expenditure directed to be disallowed @ 3% Expenditure directed to be allowed Venue Management expenses 40,22,800/- 6,03,420/- 34,19,380/- Venue expenses 23,11,665/- 6,93,500/- 16,18,165/- Professional fees 29,46,730/- 8,84,019/- 20,62,711/- Stage decoration expenses 27,30,453/- 8,11,036/- 18,92,417/- On being asked by the Bench from learned counsel for the assessee that to show from assessment order for assessment year 2006-07 that the disallowance was made @1% on similar expenses by the AO while framing assessment for assessment year 2006-07 as is referre....