TaxTMI 
TaxTMI 
2024 (6) TMI 319
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 8,67,047/- made by the Assessing Officer out of business promotion expenses incurred by the Appellant. b) The Appellant submits that on the facts and circumstances of the case as well as in the law, the said disallowance is illegal and unwarranted and therefore ought to have been deleted. II. a) The learned Commissioner of Income-tax (Appeals) erred in confirming addition of Rs. 15,000/- made by the Assessing Officer under the provisions of section 41(1) of the Income Tax Act, 1961. b) The Appellant submits that on the facts and circumstances of the case as well as in the law, the said addition is illegal and unwarranted and therefore ought to have been deleted. III. The Appellant prays for appropriate relief. IV. The Appell....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es and the entire expenses in relation to this event was debited under the head Business Promotion. The AO disallowed the expenses incurred towards Food stating that the assessee has not provided any justification for arranging lunch for 250 persons such as invitation card, event details, nature of guests their purpose, etc. The AO further held that mere production of bills does not prove that the expense was incurred wholly and exclusively for the purpose of business. The CIT(A) upheld the disallowance stating that the assessee has not been able to prove that there was business connection of the get-together party and that the assessee has not discharge the onus that the expenditure is incurred with a view bring profit or monetary advantag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ave heard the parties and perused the material on record. The assessee has debited a sum of Rs. 15,66,719/- towards business promotion expenses which consists of expenses incurred towards hotel accommodation lunch and other expenses. The assessee claimed to have incurred this expense towards a get- together organized between the foreign suppliers and local customers in order to demonstrate the requirements of the customers to the suppliers and to expand the product range. We noticed that the AO did not raise any question with regard to the expense incurred towards hotel accommodation incurred by the assessee towards stay of foreign suppliers who flew into India to participate in the get-together. However, the AO has disallowed the food expe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the claim that the expenses incurred are legitimate. In our considered view, when the assessee has submitted the documentary evidence of having incurred the expenditure on which tax is deducted at source and when the related expenses of hotel expenditure is allowed, the AO is not right in disallowing the food expenses for the reason that the same is for large number of people. Therefore, we hold that the AO is not correct in disallowing the food expenses claimed by the assessee as part of business promotion expenses. Accordingly, we delete the disallowance made by the AO. Cessation of Liability under section 41(1) of the Act. 10. During the course of assessment, the AO noticed that a sum of Rs. 15,000/- is outstanding for more than thre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rd to show that there is any intention to make payments towards the liability. In this regard, we noticed that the Jurisdictional High Court in the case of PCIT Vs. Batliboi Environmental engineering Ltd. (446 ITR 238) has considered a similar issue where it has been held that "The Delhi High Court in the case of Jain Exports (P.) Ltd. (supra) has relied upon the decisions of the Supreme Court in the case of Bombay Dyeing and Manufacturing Co. Ltd. v. State of Bombay AIR 1958 SC 328 and CIT v. Sugauli Sugar Works (P.) Ltd. [1999] 102 Taxman 713/236 ITR 518. In Sugauli Sugar Works (P.) Ltd. (supra), the Supreme Court has referred to the decision of the Division Bench of this Court in the case of Kohinoor Mills Co. Ltd. v. CIT [1963] 49 ITR....