AI Drafter 
TaxTMI 
TaxTMI 
2018 (3) TMI 879
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.... and sale of desulpherising compound and consulting for setting up of DS-station. The assessee filed its e-return on 30-09-201 declaring total income of Rs. 27,08,66,560/-. Considering the assessee's submissions along with details and evidences, the AO, determined the total income at Rs. 27,18,48,780/- by his order dt. 06-03-2014 passed u/s. 143(3) of the Act by making the following additions:- i) Rs. 4,01,828/- under the head' Advertisement Expenses' ii) Rs. 2,43,617/- under the head ' Entertainment & Hospitality Expenses iii) Rs. 27,18,48,776/- under the head ' total expenditure' iv) Rs. 27,91,12,179/- u/s. 115JB of the Act. 4. Ground no. 1 is relating to confirmation of addition of Rs. 4,01,828/- made on account of advertising expenses. 5. The AO on perusal of P & L account found that the assessee debited an amount of Rs. 4,01,828/- under the head " Advertisement Expenses". The AO was of the view that this expenditure is high and found notincurred wholly and exclusively for the purpose of assessee's business and disallowed the entire amount of Rs. 4,01,828/- and added the same to the total income of assessee. 6. Before the CIT-A, it w....
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.... No disallowance 2010-11 1,35,05,13,693 19,01,57,253 4,59,896 0 No disallowance 2011-12 1,35,66,57,068 19,12,07,659 4,01,828 4,01,828 100% Adhoc disallowance 10. We find that the ld. DR did not controvert the above submissions of the ld.AR that no such disallowances have been made in the earlier years. On perusal of above statement, we find that no disallowance was made in the A.Ys 2008-09, 09-10 & 10-11. We further find that no submissions were made by the ld.DR before us that the appeal, if any, challenging the same is pending before the Tribunal or the Hon'ble High Court. We find that the CIT-A was not correct in confirming the same. In view of above, no disallowance can be made on adhoc basis. It is a settled principle of law that no such disallowance can be made on adhoc basis, which is not at all maintainable in the ye of law. Therefore, the ground no.1 relating to addition of Rs. 4,01,828/- confirmed by the CIT-A is deleted. 11. Ground no.2 is relating to confirmation of addition of Rs. 2,43,617/- on account of Entertainment & Hospitality Expenses. 12. On perusal of P & L account the AO found that the assessee debited a....
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....3,914 04,27,873 0 No disallowance 2009-10 1,09,55,91,905 15,00,26,314 3,60,151 0 No disallowance 2010-11 1,35,05,13,693 19,01,57,253 3,75,809 0 No disallowance 2011-12 1,35,66,57,068 19,12,07,659 4,87,234 2,43,617 50% Adhoc disallowance 17. We find that the ld. DR did not controvert the above submissions of the ld.AR that no such disallowances have been made in the earlier years. On perusal of above statement, we find that no disallowance was made in the A.Ys 2008-09, 09-10 & 10-11. We further find that no submissions were made by the ld.DR before us that the appeal, if any, challenging the same is pending before the Tribunal or the Hon'ble High Court. The AO cannot make addition on adhoc basis and it is a settled principle of law that no such disallowance can be made on adhoc basis, which is not at all maintainable in the eye of law. Therefore, ground no.2 relating to addition of Rs. 2,43,617/- made on account of entertainment expenses and hospitality expenses confirmed by the CIT-A is deleted. 18. Ground no. 3 is relating to confirmation of addition of Rs. ,36,768/- on account of festival celebration, ....
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....adhoc basis and it is a settled principle of law that no disallowance can be made on adhoc basis, which is not at all maintainable in the eye of law. Therefore, ground no.3 relating to addition of Rs. 3,36,768/- on account of Festival Celebration, Gift, Presents and General expenses confirmed by the CIT-A is deleted. 25. Ground no. 4 is relating to confirmation of charging of interest on dividend distribution tax (DDT) of Rs. 3,08,29,992/- by the CIT-A. 26. It is observed from record that no discussion whatsoever was made by the AO in the assessment order in this regard. Inspite of which, the assessee raised a issue before the CIT-A challenging the said addition. The CIT-A did not adjudicate the issue as there was no such issue decided by the AO. In view of the same, we remand the matter to the file of the AO to decide and adjudicate the same afresh in the light of submissions of assessee as available before the AO. The AO shall pass a fresh order as per law, after giving the assessee adequate opportunity of hearing. The assessee is at liberty to file requisite evidences in support of the contention and claim. Therefore, ground no. 4 raised by the assessee is allowed for stat....
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....ntainable in the eye of law. Therefore, ground no.1 relating to addition of Rs. 49,42,950/- on account of Other expenses, Traveling expenses, Advertisement, Promotion & Selling of expenses made by the AO and confirmed by the CIT-A is deleted. 34. Ground no. 2 relating to confirmation of charging of interest u/s. 234B instead of section 234C of the Act. 35. After hearing the rival submissions and perusing the record, we find that the interest u/s. 234B/C of the Act is to be charged on declared returned income and not on assessed income as per decision of the of the Hon'ble Jurisdictional High Court in the case of Shri Ajay Prakash Verma in TA No. 38 of 2010 reported in 2013(1)TMI 140, which in turn, followed the law laid down by the Full Bench in the case of Smt. Tej Kumari reported in 114 Taxman 404 (PAT) (FB), where it was held that interest cannot be levied on assessed income and it can be levied only on the income declared in the return of income. The appellant Revenue challenged the same before the Hon'ble Supreme Court by way of a SLP, which was dismissed by holding that there is no merits in the appeal vide its order dt. 01-08- 2000. The ld. DR could not controvert the ....