TaxTMI 
TaxTMI 
2020 (7) TMI 101
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....g of energy, pollution control, measurement of energy flow etc. The return of income for the year under consideration was filed at an income of Rs. 31,28,220/-. The return of income was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter called 'the Act') and subsequently the case was selected for scrutiny under CASS guidelines. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee had debited an amount of Rs. 61,52,014/- as business promotion expenses and the assessee was required to furnish detailed ledger account of these expenses. From the perusal of the ledger account it was observed that the major part of the expenditure was towards purchase of precious items, gold items and cash ....
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....IT(A) have erred in confirming addition of Rs. 39,13,745.00(2,56,726 + 36,57,019) out of business promotion expenses. 2. The Ld. AO as well as the Ld. CIT(A) have erred in not appreciating that the expenditure incurred by the assessee on business promotion is customary and prevalent in the industry and that such expenditure have resulted in increase in turnover as well as net profit of the assesses in the subsequent assessment year and is an allowable expenditure. 3. That the Ld. AO as well as the Ld. CIT(A) has not appreciated that the goods vide bill No. 1210 dated 22.10.2011 were received on approval basis and once goods approved the same were converted in to regular bill which is a customary practice and these are not against cash p....
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....sonable amount of expenditure to be incurred under any head. It was also pointed out that the accounts of the assessee were duly audited and there was no adverse comment by the auditor in this regard. 3.1 The Ld. AR also submitted that there were factually inaccuracies in the order of the Ld. CIT (A) in Para 5.17 regarding payment made to Sakshi Anand in as much as the payment had been made to M/s Bansal Sons and not Sakshi Anand as was evident from page 51 of the paper book. The Ld. AR also drew our attention to the list of customers of the assessee during the various assessment years placed at pages 54 to 56 of the paper book and submitted that it is not the department's case that the assessee did not have customers or there was no incre....
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....ee has neither submitted the details of customers to whom these gifts were given and against which what was the quantum of the sales. The AO also noted that there were some discrepancies in the serial number of the bills viz. 1259 was dated 21.10.2011 whereas bill bearing serial number 1210 was dated 22.10.2011. This led the AO to conclude that the expenditure was not genuine. 5.1 The Ld. CIT (A), after considering the assessee's submissions and while confirming part of the disallowance observed that while small gifts may be necessary to promote the products, gifting costly items to the employees of a public sector company may not be so permissible. The Ld. CIT (A) also observed that the nature and quantum of expenditure would necessarily ....