2023 (5) TMI 730

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....after referred to as the 'Ld. AO') u/s 153A r.w.s. 143(3) of the Income Tax Act (hereinafter referred to as 'the Act') on 19/02/2021 for the Assessment Year 2018-19. 2. The assessee has raised the following grounds of appeal: "1. That the order dated 10.08.2021 passed u/s 250 of the Income-tax Act, 1961 (hereinafter called "the Act") by the Ld. Commissioner of Income-tax (Appeals)-24, New Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Ld. Deputy Commissioner of Income Tax, Central Circle-4, New Delhi in adding back a sum of Rs.1,17,710/- on account of expenditure incurred u/s 37 of the Act for payment of salaries, incentives etc. to the helpers and guards. 2. That the order dat....

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....f the assessee was also covered in the search and seizure and search warrant was also issued in the name of the assessee company. A notice u/s 153A of the Act was issued on 05/02/2020, in response thereto, a return of income was filed by the assessee company on 29/02/2020 declaring total income of Rs.2,23,37,390/-. 5. The Ld. AO observed that during the course of search operation, the statement of Mr. Pankaj Kumar, Manager of Finance and Accounts of the assessee was recorded u/s 132(4) of the IT Act wherein he admitted that 9 employees work at the residence of the Directors but on verification of bio metric data, it was noticed that 15 employees were working at the residence of the Directors. Accordingly, the Ld. AO sought to consider the ....

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....esponse to notice u/s 153A of the Act as meant for personal purposes of the assessee. In fact, a surrender had been made in the hands of the company for not including the same as 'perquisites' in the hands of the Directors. This goes to prove that the remaining sum of Rs.1,17,710/- is meant wholly and exclusively for the purposes of the business of the assessee company. Hence, it became allowable expenditure u/s 37 of the Act. Accordingly, ground No.1 raised by the assessee is allowed. 7. The next issue to be decided in appeal is as to whether Ld. CIT(A) was justified in upholding the disallowance of business promotion expenditure to the extent of 50% as against 100% made by the Ld. AO in the facts and circumstances of the instant case. 8....