2025 (6) TMI 1859

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....14-15. The case of the Assessee was selected for 'Limited Scrutiny'. Assessment proceedings has been initiated against the assessee and assessment order came to be passed u/s 143(3) of the Income Tax Act, 1961 (in short 'the Act') on 16.12.2016 by disallowing Rs. 4,27,835/- claimed as miscellaneous expenses and also disallowed Rs. 8,95,58,070/-, which was claimed as business expenses of the assessee. Aggrieved by the assessment order dated 16.12.2016, the Assessee preferred an appeal before the CIT(A). The ld. CIT(A), vide order dated 27.09.2018 dismissed the appeal filed by the assessee. As against the order of the Ld. CIT(A) dated 27.09.2018, the Assessee preferred the present Appeal. 3. None appeared on behalf of the assessee and no a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... services rendered, the appellant receives 'service charges' and the same is credited to profit and loss account. Apart from that, a very substantial amount is received from the clients under the head 'custom reimbursement' Out of the said receipts, various expenses are incurred by the appellant on behalf of the clients who are its principals. The invoice raised by the appellant is for the 'gross amount' which includes 'service charges' as well as expenses under different heads which are clubbed as 'custom reimbursement expenses in the books of account of the appellant. It is the contention of the appellant that custom reimbursement expenses are neutral in the sense that the said expenses are incurred on ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e of the business out of the amount received from its clients. In case there is a surplus out of the gross amount received from the clients, the said surplus will be the income of the appellant which will be subject to 3117, tax. Merely stating that the receipts were revenue neutral does not explain the case of the appellant. In this case, onus was on the appellant to prove before the AO that the expenses the expenses claimed out of custom reimbursement (received) were expended wholly and exclusively for the purpose of business. The appellant has not produced the details of reimbursement expenses claimed before the AO and also the supporting bills and vouchers were not produced in respect of the aforesaid expenses claimed. It is noted that ....