TaxTMI 
TaxTMI 
2023 (7) TMI 234
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....are Customary in nature and with a view to Promote Export Business of the assessee company and it has no any personal element. 3. The CIT(A) erred by enhancing the disallowance to Rs 18,18,624/- without appreciating that the account of the assessee is audited and the disallowance is completely based on Surmise and guesswork which cannot partake the character of evidence. 4. The CIT(A) failed to appreciate that the Credit Card always issued in individual name of the director which is being commonly used and if any expenditure of personnel in nature, the same has been separately accounted for and not been claimed as business expenses applying business prudence. 3. The ld. counsel of assessee submitted that the addition relating to Advertisement & Marketing Expenses from Rs 3,00,000/- to Rs 18,18,624/- Primarily on adhoc basis without appreciating the business exigencies and further without appreciating that the expenses were incurred wholly and exclusively for the purpose of business and the disallowance is against the commercial expediency. He further submitted that the disallowance relating to Advertisement & Marketing expenses erred by not appreciating that the expenses incur....
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....regard payment to Axis Interior Pvt. Ltd. for Rs 59 lacs, the appellant company has furnished necessary details in the form of bills, ledger account, bank statement, photographs etc. to establish that the said payment was made in connection with exhibition held in Dusseldorf, Germany and is a different transaction which was entered into with another group company of Ms Axis Interior Pvt. Ltd for designing services received in respect of new corporate office of the appellant company at Faridabad. No adverse view is attracted on this point. 6.10.1 As regard payment to non-resident amounting to Rs 26,78,272/-, it has been submitted that the same was made to Messe Dusseldorf and Klaus Harren GMBH in Germany towards their services rendered in Dusseldorf K-Show, the exhibition in which the appellant company participated. In the absence of any PE in India and referring to Art 7 of DTAA between India and Germany and correspondence from Klaus Harren GMBH stating that tax is to be paid in Germany and producing Form 15CB for non-deduction of TDS, the appellant has substantiated that TDS was not required to be deducted in respect of these transactions. The appellant's explanation is acce....
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....purchase of luxury items such as apparels and shoes etc. of personal choices. A careful perusal of details filed make it amply clear that most of these expenses certainly include expenses incurred on family and personal purchases during foreign trips and purchase of items in India for personal consumption. It was argued that the appellant company has substantial revenue from export and to strengthen its business ties and to explore further business, it has to spend money in entertaining customers and giving them gifts. If that is so, it must be established by leading evidences. It was argued that credit card expenses have both personal and business expenses and the appellant has segregated the two and claimed only those related to business on the basis of its business prudence. However, no such basis was divulged when there is such queer mixing of business and non-business expenses. The appellant must come out with clean hands segregating the two to claim only those expenses which have been incurred wholly and exclusively for business purposes. In the present case, the appellant has no reliable evidences or explanation in respect of such expenses. 6.10.7 The limited information f....
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....n clients to whom the gifts, parties, lunches etc. were given. He further noted that the information given by the assessee was vague and proves nothing and purchases of branded apparels and luxury items have been made for giving gifts to customer without identifying the person huge amounts has been incurred on providing gifts and hospitality to foreign customers without identifying the guests which make it clear that these are expenses of personal nature only and as the items purchased were not the items which can be given to an organisation or customer and the same were purchased as per personal choice and consumption. These facts factual finding have not been negatived by the ld. counsel of assessee. 7. The ld. CIT(A) disallowed 25% of credit card expenses that is Rs. 13,85,670/- by considering the entire explanation of assessee and by observing that the genuineness of expenses on dinner meeting with domestic and international customer as having been incurred wholly and exclusively for the purpose of business has not been established as the assessee has not produced supporting bills and vouchers, it has failed to establish identity of customer for whom such huge expenditure has ....