TaxTMI 
TaxTMI 
2018 (1) TMI 281
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....n which is not permissible even further there being misinterpretation of the case laws. 2. Because the action for making proportionate addition of Rs. 1,82,268/- @ 12% by invoking the provisions of section 36(1)(iii) is under challenge on facts & law. Even the Quantum and rate application is being challenged. Date of Hearing 13.09.2017 Date of Pronouncement 09.10.2017 3. Because the action for disallowance of Rs. 3,54,737 towards advertisement Expenses invoking the provisions of Section 40(a)(ia), 194C is being challenged on facts & law." 2. The brief facts of the case are that the assessee company is engaged in manufacturing and sale of Heena Powder, hair dyes and other beauty products. He filed return of income on 28.09.2006 decla....
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....ve that due to failure/omission on the part of the assessee to disclose fully and truly material facts, an income of Rs. 3,96,000/- of the assessee for the AY 2006-07 has escaped assessment within the meaning of section 147 of the Income Tax Act on this account. 2. Later on, it has also come to notice that the assessee has purchased mixture machine on 09.07.2005 for Rs. 64,480/- and this expenditure has been claimed as Revenue expenditure in its profit and loss account. Such expenses being of capital nature are not allowable expenditure and these expenses are required to be capitalized and depreciation @ 15% which computes to Rs. 9,672/- is allowable. Thus, the assessee has made wrong claim of expenditure amounting to Rs. 54,808/-in its ....
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....Rs. 64,480/- for purchase of Mixer Machine which has been debited to profit and loss account as repair and renovation expenses and (iii) the assessee has claimed exhibition expenses of Rs. 3,54,737/- which are in the nature of advertisement expenses on which no TDS was deducted by the assessee. Based on these reasons, the Assessing Officer reopened the assessment u/s. 147 of the IT Act. 3. In response to this notice, the assessee filed return of income on 25.03.2011. The assessee filed reply which was considered by the AO, and rejecting the contentions of the assessee, made following additions vide reassessment order : i). Addition on a/c of non-capitalization of Interest 3,96,000/- ii). Addition a/c of non-capitalization of expenses ....
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....ent surplus funds which were utilized in the construction activities. No loan had been taken for the construction of property. The Assessing Officer could not establish any nexus that the construction in the flat was made out of any borrowed funds. In respect of exhibition expenses debited of Rs. 3,54,737/-, he reiterated his submissions made before the ld. CIT(A), which is as under : "A sum of Rs. 3,54,737.95 has been debited to Exhibition expenses having being incurred by M/s. Mullar & Phipps India Ltd. on our behalf (Pg.21). The said sum so paid is in fact publicity expense/selling expense, where the company's products are displayed at various stages and platforms/exhibitions. The expenses are initially borne by M/s. Mullar & Phipp....