2019 (10) TMI 514

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..... 1,19,896/- the same by virtue of 154 order Dt. 30.04.2019." 2. Regarding Ground No.1, briefly stated, the facts of the case are that during the course of assessment proceedings, the Assessing officer on verification of the Trading and Profit & Loss account noticed that the assessee company has claimed following expenses: 1. Repair & maintenance : Rs. 62,04,409/- 2. Food and Beverage : Rs. 17,87,091/- 3. Annual Day Programme : Rs. 5,51706/- 3. During the course of assessment proceedings, the assessee was asked to furnish supporting evidences with regard to the above expenses claimed. In response thereto, A.R. of the assessee produced bills and vouchers with regard to the above. On verification, it was noticed by the Assessing officer that the above expenses were not found fully supported by vouchers. Some of the expenses have been claimed on self made vouchers without any supporting bills/receipts. In the absence of proper vouchers, the expenses are not subject to complete' verification and as such cannot be allowed in toto. Personal use of the above facilities by the staff cannot be denied. Keeping in view of the facts and circumstances of the....

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....e expenses of Rs. 5,51,706/-, it was submitted that the expenditure is incurred to maintain the work culture of the company and to motivate the staff to do better in their respective area of work. The annual day meetings are held for the purpose of keeping an eye on the operational activities of company, improving the work culture & technique and carving out the direction of the company in which it need to work to achieve its goals. The expenditure is reasonable considering the turnover of the company. Neither in the past nor in the subsequent years, any disallowance was made out of these expenses. Hence, no disallowance in called for. 8. It was further submitted that the Ld. CIT(A) after considering the explanation of assessee has reduced the disallowance out of these expenses to Rs. 2 lacs without pointing out any specific expense which is not supported by documents. There is no restriction in the law for incurring expenditure in cash. Hence, such adhoc disallowance of Rs. 2 lacs is uncalled for. Reliance in this connection is placed on the following cases:- * DCIT Vs. ABC Bearing Ltd. (2017) 157 DTR 242 (Mum.) (Trib.) * ACIT Vs. Ganpati Enterprises ....

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....meeting of their board of directors as per the copy of the resolution enclosed. This is a contractual liability and the company is under obligation to pay the said expenses, therefore the said expenses is an admissible expenses and deserves to be allowed." 12. The reply filed by the assessee was considered by the AO but not found tenable because as per Resolution, the name of house allotted for Director or Managing Director and the electricity bills are in different names. Therefore it is clear that the company pays electricity bills of different persons and claim expenses. The details of Resolution and electricity bills are as under:- S. No. Address of House/Building Name on the electricity bills As the Resolution house allotted to Date of Resolution Matched or Not 1. 5/8, Kala Kua, Alwar Smt. Sumitra Devi Sanghi W/o Sh. Jaswant Singh Sh. Nikunj Sanghi 05.01.1989 Not 2. 501, Wonder Height, Alwar Smt. Susmita Sarraf W/o Sanjay Sarraf Sh. Sanjay Sarraf 10.05.2011 Matched 3. 701 & 702 Wonder Height, Alwar Sht. Nikunj Sandhi Sh. Jaswant Singh Sh. Nikunj Sanghi 7.02.2014 Matched 4. 703 Wonder Height, Alwar....

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....emoving their common partition walls. Flat No.701 & 702 are owned by Sh. Nikunj Sanghi, Director of the assessee company and Flat No.703 is owned by Smt. Nalini Goyal, sister of Sh. Nikunj Sanghi. Since flat no. 703 is in ownership of Smt. Nalini Goyal, electricity bills are in her name. The assessee has provided the accommodation to Sh. Nikunj Sanghi for his residence and it has resolved to bear the electricity expenses in terms of Board Resolution dt. 07.02.2014. The AO has allowed the electricity expense of flat no. 701 & 702 by following the Board Resolution dt. 07.02.2014 but has not allowed the electricity expenses in respect of flat no. 703 which is also governed by the same board resolution. All the three flat numbers refer to one residential house and thus, allowing electricity expenses for one part and disallowing for the other part does not hold good. Hence, only because in the electricity bill the name of the owner of house is mentioned, cannot be a reason for disallowing the electricity expenses. In view of above, disallowance confirmed by Ld. CIT(A) be directed to be deleted. 17. We have heard the rival contentions and perused the material available on record. In r....