TaxTMI 
TaxTMI 
2023 (5) TMI 1000
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....ssee. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds: "1. That on the facts and law involved the Ld. Commissioner of Income Tax (Appeals) [Ld. CIT(A)] erred in confirming the adhoc disallowance of Rs 5,33,592/- (being 50% of total expenditure) made by Ld. Assessing officer [Ld. AO] for alleged disallowance on account of design & development expenditure incurred by the appellant by alleging 50% of the expenditure incurred as non genuine and balance as genuine. 1.1 That the disallowance as made by Ld. AO and confirmed by Ld. CIT(A) is based on erroneous views and / or nonappreciation of the facts and law involved and without properly considering the submissions and material on record. As such too the disallowance is unwarranted and not capable of being sustained. 2. That on the facts and law involved the Ld. Commissioner of Income Tax (Appeals) [Ld. CIT(A)] erred in confirming the addition of Rs 25,49,235/- made by Ld. Assessing officer [Ld. AO] for alleged addition on account of suppressed income from sale of Katran/Scrap Material. The addition was made by Ld. AO solely based on a random search conducted on the google/internet ....
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....al, who is a related party of the firm. AO therefore considered 50% of the total design & development expenses to be not allowable and accordingly disallowed Rs.5,33,592/-. 6. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who upheld the order of AO by noting that the amount paid to the parties were related to the partners of the assessee firm and assessee had not furnished any evidence of professional qualification of the persons to whom the amounts were paid. CIT(A) after considering the submissions of the assessee, remand report and reply of the assessee upheld the order of AO. Aggrieved by the order of CIT(A), assessee is now before the Tribunal. 7. Before us, Learned AR reiterated the submissions made before the AO and CIT(A) and further submitted that assessee had incurred similar expenditure towards "Design and Development charges" and had paid to the same persons in the preceding and succeeding years but no disallowance has been made by AO in the assessment orders framed u/s 143(3) of the Act of those years. In support of his aforesaid contention, he pointed to the chart of the payments made to the various persons in the A.Ys. 2013-14, 2014-15, 20....
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....AR has also pointed to the table tabulated in the synopsis which depicts that Aarti Uppal was paid Rs.6,00,000/- in A.Y. 2014-15 and Rs.6,00,000/- was also paid in the year under consideration and for A.Y. 2016-17, she has been paid Rs.11,50,000/- and Rs.12,00,000/- in A.Y. 2017-18. He has further pointed that payment to paid Ms. Poonam Khanna in the year under consideration was Rs.1,38,000/-, which was far less than the payments made in the earlier years and same in the case of Ritika Khanna and Surindra Bountra. We, therefore, find force in the argument of the Learned AR that though the similar expenses were incurred by the assessee in earlier and subsequent years and payments to the parties which have been disallowed in the year under consideration was not higher in the year under consideration as compared to earlier and subsequent years. No disallowance of expenses have been made in those years. We further find that AO has also not brought on record any material to demonstrate that the payments made to the parties who are stated to be related parties are in excess of the amounts paid to other parties for similar service or are not bonafide. Before us, Learned DR has submitted t....
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....grieved by the order of CIT(A), assessee is now before the Tribunal. 12. Before us, Learned AR reiterated the submissions made before AO and CIT(A) and further submitted that addition has been made solely on the basis of random search conducted by the assessee on internet and which is without any basis. He further submitted that addition has been made purely on the basis of suspicion, surmises and conjectures and while presuming suppressed income, AO has ignored the actual quantity and price at which such Katran was actually sold by the assessee. He thereafter pointed to the table for various assessment years tabulated at page 12 & 13 of the synopsis and from that table, he pointed that the percentage of Katran to total sales in the year under consideration was 0.10% which is comparable to the percentage of Katran to total sales in other assessment years and no addition has been made by AO in the assessments framed u/s 143(3) in earlier or subsequent years. He therefore submitted that merely on the basis of suspicion the addition on account of hypothetical income cannot be made and therefore is bad in law and therefore it be deleted. 13. Learned DR on the other hand supported the....