TaxTMI 
TaxTMI 
2026 (1) TMI 598
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....ake up the Revenue's appeal for Assessment Years 2013-14 in ITA No.2442/Del/2023. ITA NO. 2442/DEL/2023 (Assessment Year 2013-14) (Revenue's Appeal) 4. Before us, Ld. AR of the assessee filed an application under Rule 27 of the ITAT Rules, 1963, according to which the assessee can take any issues though he may not have appealed which was decided against him. In the prayer made under Rule 27, the assessee has challenged the action of the Ld. CIT(A) in rejecting the assessee's legal issue with respect to initiation of reassessment proceedings u/s 148 of the Act. In support of prayer under Rule 27 of the Rules, the Ld. AR of the assessee has made following submissions in detail: "Initiation of Reassessment proceedings wholly without jurisdiction As stated above, the original assessment was completed vide order dated 29.03.2016 passed under section 143(3) of the Act/pages 119 to 128 of the paper book), assessing the income of the assessee at Rs. 38,50,02,139, after making disallowance of Rs. 2.16.018 on account of alleged late deposit of EPF and ESI. Subsequently, after the expiry of the limitation of four years, notice dated 31.03.2021 as issued under ....
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....by reason of the "failure of the assessee to disclose fully and truly all material facts necessary for assessment". The proviso to the section places fetters on the powers of the assessing officer to initiate reassessment proceedings beyond the period of four years from the end of the relevant assessment year, where the assessment has been previously undertaken under section 143(3) of the Act unless the income has escaped assessment by reason of the "failure of the assessee to disclose fully and truly all material facts necessary for assessment" In the present case, during the course of original assessment proceedings, specific queries were raised by the assessing officer regarding the AMP expenses incurred by the assessee which were duly replied by the assessee to the satisfaction of the assessing officer (elaborated as under) and after such an exhaustive examination, the claim of the assessee was accepted by the assessing officer during original assessment, as demonstrated hereunder Enquiry, made during original assessment proceeding for AY 2013-14. -Vide notice dated 17.07.2015 issued under section 142(1) of the Act for assessment year 2013-14/6 pages ....
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....ncurred by the assessee Reliance in this regard is placed on the following decisions wherein the Courts have held that reopening of proceedings after the expiry of four years shall be invalid in terms of proviso to section 147 of the Act unless there is failure on the part of the assessee to disclose true and material facts. - CIT v. Foramer France: 264 ITR 566 (SC) - D.T. & T.D.C. Ltd. vs. ACTT: 232 CTR 260 (Del) - CIT v. Fenner India Ltd.: 241 ITR 672 (Del) - Haryana Acrylic Manufacturing Company: - Purolator India Ltd: 343 ITR 155 (Del) 308 IIR 38 (Del.) - Atma Ram Properties P. Ltd. v. DCIT: 343 ITR 141 (Del) 23 - Avtee Ladi v, DCIT: 370 ITR 611 (Del) - CIT v. Motor & General Finance: 184 Taxman 465 (Del.) In the case of Calcutta Discount Co. Ltd Vs. ITO 41 ITR 191 (SC), the Hon'ble Apex Court, held that- (i) it is the assessee's duty to disclose primary facts, including particular entries in account books, particular portions of documents and other evidence disclosed (6) once all primary facts are before the assessing authority, be requires no further assistance by way of disclosu....
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....f the AO that the facts were embedded in the manner that the same could not have been discovered with due diligence. The said observation, too, is apart from being general, legally and factually flawed/ perverse, It is emphatically reiterated that no specific allegation whatsoever, has been made out in the reasons recorded to point out whether there was any failure on the part of the assessee to disclose fully and truly all material facts in relation to its assessment of income for the relevant year. In the reasons recorded, the AO has merely repeated the language of proviso to section 147 of the Act that there was failure on the part of the assessee to disclose material facts, without specifically spelling out any such actual failure, except making vague and bald observations. In the absence of specific charge in the reasons recorded pointing out any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and mere mention in the reasons that the assessee has failed to furnish material facts, without spelling out such material facts, is not sufficient compliance, which is a pre-requisite for valid initiation of t....
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....ITR I held that "Section 147 of the Act does not postulate conferment of power upon the assessing officer to initiate reassessment proceedings upon his mere change of opinion." The aforesaid decision of the Delhi High Court has Court has been affirmed by the Supreme Court in CIT vs. Kelvinator of India Ltd: 320 ITR 561(SC). Reliance is also placed on the decision of the Full Bench of the Delhi High Court in the case of Usha International Limited: 348 ITR 485 wherein the Court held that re-assessment proceedings will be invalid in case an issue or query is raised but thereafter the assessing officer does not make any addition in the assessment order On perusal of the aforesaid, it will kindly be appreciated that the Court clearly held that in case where query is raised by the assessing officer in the original assessment but thereafter the assessing officer does not make any addition in the assessment order, in such situations it should be accepted that the issue was examined but the assessing officer did not find any ground or reason to make addition or reject the stand of the assessee. In such a situation, the Court held that reassessment will be invalid because t....
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....1 (Del), CIT vs. Insecticides (India) Ltd. 357 ITR 330 (Del), Revolution Forver Marketing (P) Lad. v. ITO 413 ITR 400 (Del) and CIT vs. And Jain 299 ITR 383 (Del) In the reasons recorded, no tangible information/ material has been highlighted that may even throw any doubt on the genuineness of the transactions undertaken by the assessee. Further, the reasons recorded do not reflect any independent application of mind to the information received and the basis and material of the information has not been examined and simply relied upon in a mechanical manner without arriving at an independent belief whether or not any income had escaped assessment. Reassessment initiated merely on the basis of vague report of the investigation wing/appraisal report, without any independent application of of mind, is beyond jurisdiction, bad in law and void ab initio, as has been held in the following legal decisions: * ACTT vs. Dhariya Construction Company 328 ITR 515 (SC) * Pr. CIT. Meenakshi Overseas (P.) Ltd. 395 ITR 677 (Del) * Well Trans Logistics India (P.) Lad. vs. ACTT [2024] 166 taxmann.com 72 (Def) * CIT vs. SFIL Stock Broking Ltd: 325 I....
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....he context of section 142 (2-4) which empowers on AO to direct a special audit. The obtaining of the prior approval was held to be mandatory. The Supreme Court in Rajesh Kumar (supra) observed as under. "58. An order of approval is also not to be mechanically granted. The same should be done having regard to the materials on record. The explanation given by the assessee, if any, would be a relevant factor. The approving authority was required to go through it. He could have arrived at a different opinion. He in a situation of this nature could have corrected the assessing officer if he was found to have adopted a wrong approach or posed a wrong question unto himself. He could have been asked to complete the process of the assessment within the specified time so as to save the Revenue from suffering any lass. The same purpose might have been achieved upon production of some materials for understanding the books of accounts and/or the entries made therein. While exercising its power, the assessing officer has to form an opinion. It is final so far he is concerned albeit subject to approval of the Chief Commissioner or the Commissioner, as the case may be. It is only at that ....
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....TR 198 (Del) (Dept. SL dismissed in (2024) 461 ITR 339 (SC)) -Yum! Restaurants Asia Pte. Restaurants Asia Pte. Ltd. vs. DDIT [2017] 397 ITR 665 (Del) -Central India Electric Supply Co. Ltd. vs. ITO [2011] 333 ITR 237 (Del) -Kartik Sureshchandra Gandhi vs. ACIT [2023] 295 Tasman 442 (Bom) -PCIT vs. Subodh Agarwal [2023] 149 taxmann.com 373 (All) -SMW Ispat (P.) Lad. v. ACIT: [2024] 163 laxmann.com 119 (Pune - Trib.) In that view of the matter, the approval/sanction u/s 151, having been granted in a mechanical manner, the same stands vitiated in law and the consequent impugned proceedings initiated u/s 147/148 of the Act, are liable to be quashed: For the aforesaid cumulative reasons, it is submitted that the appeal filed by the Revenue deserves to be dismissed. 5. The Ld. AR further submits that the reassessment proceedings are merely changed of opinion and, therefore, the same deserves to held bad in law and the consequent order be quashed. 6. On the other hand, Ld. CIT-DR submits that Ld. CIT(A) has not decided the issue of reopening of assessment taken by the assessee and therefore, Rule 27 cannot be invoked. He....
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....) dated 31.03.2022 wherein the total income of the assessee was assessed by making additions of Rs. 10,96,92,546/- after disallowing various expenses claimed. 9. Against the said order, the assessee has preferred the appeal before the Ld. CIT(A) who after considering the merits of the submissions made, had deleted the disallowances made by the AO. Aggrieved by the said order, the Revenue is in appeal before the Tribunal by taking the following grounds of appeal: "1. The Ld. CIT(A) has erred on facts and in law, in deleting the disallowance of Rs. 1,76,17,395/- made u/s 37 of the Income Tax Act, 1961, on account of bogus Advertisement, Marketing & Promotion (AMP) Expenses, by ignoring the facts that the genuineness of the expenses could not be verified since the assessee failed to provide the complete details of these entities and their bills/vouchers & confirmation from the parties. The details of parties provided by the assessee did not respond to the notices issued to them during the course of assessment proceedings. 2 The Ld. CIT(A) has erred on facts and in law, in deleting the disallowance of Rs. 35,42.857/- made u/s 37 of the Income Tax Act, 1961, on acco....
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....etween the product lines sold by assessee vis- à-vis its other sisterly concerns to an average discerning customer and the entire product line is only sold under "Lotus" Brand. 10. (a) The Order of the Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 10. Ground of Appeal No.1 is with respect to the deletion of disallowance made by the AO out of Advertisement, Marketing & Promotion (AMP) Expenses mounting to Rs. 1,76,17,395/- by holding the same as non-genuine expenses. 11. Before us, Ld. CIT-DR vehemently supported the order of the AO on this issue and submits that a survey was carried out at the business premises of the assessee on 31.03.2018, and based on the findings of the survey, the AO observed that assessee has got manufactured its goods from two firms namely M/s Kanidi Cosmeceutical (hereinafter referred to as'KC') and M/s Lotus Herbals Color Cosmetics (herein after referred to as 'LHCC'). During post survey enquiries, it was found that assessee has claimed certain expenses which are not verifi....
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....penses to the said parties to the said parties was furnished before the AO and by no stretch of imagination it could have been alleged that the genuineness of these AMP expenses remained unsubstantiated for lack of documentary evidences. Pertinently, the AO, in remand report dated 22.05.2023 [@ pages 512 to 518 of the paper book, relevant ja 512 to 5131, has also categorically accepted that the required supporting documents qua all the aforesaid parties were submitted by the assessee vide replie(s) dated 11.03.2022 and 28.03.2022 furnished during assessment proceedings. Further, the AO had also sent notices u/s 133(6) of the Act to the parties and after reconciling the accounts and records submitted by these parties, the AO was satisfied about the genuineness of the parties and genuineness of the transactions. In view of above, considering that the AD has categorically admitted that evidences in support of the said payments were duly furnished by the assessee, the allegations basis which disallowance of AMP expense was made to the AO stands obliterated and no appeal by be Revenue is maintainable on this issue. Reliance in this regard is placed on the foll....
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....by such parties Further, without prejudice to the fact that the required response(s) to notice(s) under section 133(6) were furnished by the aforesaid parties, it is respectfully submitted that it has been repeatedly held by the Courts that the mere fact that a third party does not respond to the notice and or appear before the assessing officer to confirm a transaction cannot transaction Reliance in this regard is placed on the following decisions: - CTT v. Fancy International: 166 Taxman 183 (Delhi) - CIT v. Haresh D. Mehta: 86 taxmann.com 22 (Bombay) - CIT vv Nikunj Eximp Enterprises P. Lad: 372 ITR 619 (Bom.) - Diagnostics v. CIT: 334 ITR 111 (Cal) - Gudwala & Sons v. ACFT: 155 taxmann.com 532 (Delhi-Tob.) - M/s. Kesha Appliances Pvt. Ltd. v. ITO: ITA No.2715/Del/2016 - DCIT v. Bhaijee Commodities (P.) Ltd: ITA No.5323/Del/2015 - Umbrella Project Pvt. Ltd. v. ITO, ITA. No.5955/Del/2014 - Phool Singh v. ACIT: ITA No.2901/Del/2014 - Cheil India (P.) Ltd. v. ITO: 68 taxmann.com 410 (Delhi-Trib.) - M/s LalsonsJewellers Ltd. v. ACTT ITA No.5241/Del/2004 (Del) In view ....
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....ns u/s 133(6) of the Act to various parties, out of which four parties namely (i) M/s Krishna Attire & Hospitality Services (Krishna Attire) Rs. 7,46,697/- (ii) M/s Shan Creations - Rs. 25,69,331/- (iii) M/s Brand Vision - Rs. 8,00,000/- and (iv) Symmetrix Prints Pvt. Ltd. ('Symmetrix Prints)- Rs. 1,35,01,367/- had not filed any response to the notice issued, therefore, the identity and genuineness of the transactions with these parties remained unproved. Accordingly, the AO had made the disallowance of the payment made to them. It is further seen that before the Ld. CIT(A) during the course of appellate proceedings, assessee has filed all the relevant details as additional evidences and remand report was obtained from the Assessing Officer. In the remand report as available at pages 19 to 24 of the CIT(A)'s order, the AO has accepted that the parties have filed all the details and their identity and services rendered were not doubted. The remand report so filed is reproduced as below: To, The Commissioner of Income Tax (Appeals), Appeals-27, Delhi. (Through Proper Channel) Sir, Sub: Verification of details in the case of M/s Lotus Herba....
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.... Card d. Sample copies of invoices e. Sample copies of journal vouchers Brand Vision BGUPS2304A a. Copy of ITR b. Copy of Ledger Account in the books of assessee company c. Copy of PAN and GST registration d. Copies of journal vouchers and invoice e. Turnover Certificate f. Screenshot of compliance Symmetrix Prints Private Limited AALCS7753A a. Copy of ITR b. Copy of Ledger Account in the books of M/s Symmetrix Prints Private Limited c. Copy of PAN and GST registration d. Sample Copies of journal vouchers and invoice e. Turnover Certificate f. Sample copies of purchase order and journal voucher g. Screenshot of compliance to notice u/s 133(6) h. Certificate of turnover AY 2015-16 Name of the party PAN Details of documents submitted by the assessee vide letters dated 11.03.2022 and 28.03.2022 Iqra Display Private Limited AACC19015L a. Copies of ITR b. Confirmation of Ledger account c. Copy of PAN and GST/VAT registration d. Sample Copies of journal vouchers and invoice e. Turnover Certificate f. Sample copies of purchase order and journal voucher g. Screenshot of compliance to no....
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....rtire & Hospitality Service AIRPM1515H a. Copy of PAN b. Copy of GST registration c. Copy of Adhar Card d. Sample copies of invoices e. Sample copies of journal vouchers. Shan Creation ACSPG7894A a. Copy of PAN b. Copy of GST registration c. Copy of Adhar Card d. Sample copies of invoices e. Sample copies of journal vouchers. Brand Vision BGUPS2304A a. Copies of ITR b. Confirmation of Ledger account c. Copy of PAN and GST/VAT registration d. Sample Copies of journal vouchers and invoice e. Turnover Certificate f. Screenshot of compliance to notice u/s 133(6) Symmetrix Prints Private Limited AALC97753A a. Copies of ITR b. Copy of Ledger account in the books of M/s Symmetrix Prints Private Limited i. Copy of PAN and GST/VAT registration j. Sample Copies of journal vouchers and invoice k. Turnover Certificate l. Sample copies of purchase order and journal voucher m. Screenshot of compliance to notice u/s 133(6) n. Certificate of turnover 3. Accordingly, in light of facts and decision as above, your honor is most respectfully requested to decide the appeal as per the provisions of law,....
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....n of one of the employee of the assessee wherein it was found that salary of Rs. 35,42,857/- was paid through credit notes to 293 employees and was claimed as expenses. The assessee claimed that it relates to employees which were placed at the distributor / local retailer place where they worked as companies employees and demonstrate the products of the company to walk-in customers. The AO has made disallowance by holding that assessee has not submitted any agreements etc.in this regard. The Ld. CIT(A) has deleted the disallowance so made by appreciating the fact that the staff was working at the retailer show room. Against this Revenue is in appeal before the Tribunal. 17. Before us, Ld. CIT-DR supported the order of the AO and submits that the payments were made through credit notes and no details of the employees working under these arrangements were submitted nor found during the course of survey at the business premises of assessee. During the course of survey, the salary expenses booked through these credit notes were not found recorded in the tally records and were recorded thereafter. It is further submitted that the assessee has also failed to explain the nature of serv....
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.... may be. It may be appreciated that bearing of salary expenses of such Beauty Advisors is nothing that a marketing and sales promotional exercise which is undertaken by the assessee, thus, the assessee books these expenses as AMP Expenses in its financial accounts. The said expenditure is incurred solely with the objective of increasing/boosting the sale of products of assessee and is accordingly, an allowable business expenditure in hands of the assessee Rebuttal of allegations of AO In the light of the aforesaid background, the allegations levelled by the assessing officer are rebutted as under. Re(i): No rationale for making salary payments via credit notes The detailed rationale for the same stands duly explained supra which has also been accepted by the CIT(A). Re (ii): Absence of agreement, record of payments in accounting software and encashment of salary pavements by employees It is pertinent to point out that there is no separate agreement is entered by the assessee with the distributors and dealers for such arrangement, the credit notes are issued by the assessee only upon receiving the necessary claim documen....
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....able for making such arrangements for deploying the staff at retailer or distributor place. Further the AO observed that the said credit notes were not entered in tally records at the time of survey. However, from the perusal of the observations of Ld. CIT(A), we find that the Ld. CIT(A) in para 6.1 to 6.4 of the order has discussed this issue in detail and accepted the contention of the assessee that the staff of the assessee were deputed at various shops, malls, outlets show room where they were undersigned the duty of providing/demonstrating the product details marketed by the assessee company under the brand name "LOTUS" to the walk-in customers. It is a common practice of marketing and promoting goods and the companies are placing their employees at the place of retailer to demonstrate and promote their products directly to the customers. White goods companies, mobile companies are few examples which are following this model to promote their products. The AO has failed to appreciate this fact and made the disallowance. The existence of credit notes has not been denied and the payments to the respective parties / retailers on this account have been accepted. During the course o....
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....ion of the order of the AO in this regard. 21. The ld. CIT DR further submits that these expenses were incurred by the assessee on the products manufactured by two sister concerns namely KC and LHCC. He submits that the entire products manufactured by them were traded and marketed by assessee company and the expenditure incurred on the marketing and sales promotions had direct relationship with their sales and had not added any value to the products. As these expenses are directly related to increase in demand of the products manufactured by the sister concerns for the assessee and benefited the manufacturing units to achieve better turnover. Accordingly, the action of the AO in allocating the AMP expense to the manufacturing units is in accordance with law and he requested for the restoration of the disallowance made by the AO. 22. On the other hand, the Ld. AR of the assessee submits that assessee is working in this line of business of last 20 years and created, nurtured and developed the brand 'LOTUS' in the field of cosmetic and skin care products. The brand 'LOTUS' is owned by the assessee and is renowned skin care product and belongs to the assessee only. The assessee i....
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....nown among the consumers due to its brand name-"Lotus"; (b) It is not disputed by AO that to build a brand image, any company has to incur AMP expenditure (refer para 12.1); (c) The entire AMP Expenses incurred by the assessee were undisputedly wholly and exclusively incurred for assessee business aspect has been disputed by the AO; (d) The only case of the AO is that part of the AMP expenses ought to have been apportioned and borne by the two manufacturing entities, that too, simply on the ground that the said two entities were claiming tax holiday under section 80IC of the Act and the AO, on conjectures surmises, concluded that AMP expenses have not been apportioned to show higher profits in the said entities; (e) It is, in fact, not even the case of the AO that the sale consideration received by the two entities for supply of products manufactured for to the assessee on a contract basis was not at arms' length-in fact, AO has not disputed that the TNMN method followed for benchmarking the turnover of the two entities stood accepted to be at arms' length under section 92C of the Act (1) At no stage, has it been alleged, much less demons....
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....es the products manufactured by KC and LHCC at arm's length price, and thereafter, sells the same in the open market under its own brand name "Lotus" The aforesaid business model has been consistently followed by the assessee for more than two decades and after incurring significant expenditure on advertisement and promotion of its brand "Lotus", the assessee stands in a position to market and sell its products at significantly higher prices as opposed to the prices which such products would otherwise fetch without the brand name of Lotus attached to it. It is further pertinent to note that LHCC and KC are manufacturing entities and assessee is the trading/ marketing entity which owns the brand "LOTUS". LHCC and KC sell their products to the assessee only and do not make any sales to third parties, no AMP expenditure is required to be incurred by the said entities. The assessee owns the brand "LOTUS and thus, AMP expenses are incurred by the assessee in order to attract customers and to build its presence in the market. The entire AMP expenses were, it is submitted, incurred wholly and exclusively for the purposes of creation and promotion of its bran....
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....sallowance of such AMP Expenses could have been made in the hands of the assessee. Reliance in this regard is placed on the following decisions: - Sassoon J. David and Co. P. Ltd. v. CIT: 118 ITR 261 (SC) - CIT, Chandulal Keshavial & Co.: 38 ITR 601 (SC) - Nestle India Ltd DCTT: 111 TTJ 498 (Del) - CIT. Vs. Samsung India Electronics Ltd.: (2014) 42 taxmann.com 498 (Delhi) - CIT. Vs. Adidas India Marketing (P) Ltd.: 195 Taxman 256 (Del) - CIT v. Agra Beverages Corporation (P) Ltd.: ITA No.966 of 2009 (Del HC) - Sony Ericsson Mobile Communication India (P) Ltd V. CIT: 374 ITR 118 (Del) - Sony India (1) Laf v. Dy. CIT: 114 ITD 448 (Del) - Star India (P) LAL. 103 ITD 73 TM (Mum) - National Panasonic (India) Lal. v. JCIT: ITA No. 3238/Del/2002 - Samsung Indor: ITA Nos. 1360 & 3374/Del/2002 - DCIT v. Manti Countrywide Auto Financial Services Pvt. Ltd.: ITA Nos. 2181 to 2183/Del/2010 For the aforesaid reasons, it is submitted that since the entire AMP expenses were incurred by the assessee wholly and exclusively for its business and in order to promote its brand "Lotus", th....
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.... of manufacturing concern and trading concern. AMP expenditure is primarily a marketing expenditure incurred by any FMCG company engaged in marketing and sale of products in order to penetrate into highly competitive market of consumer products. A contract manufacturer, on the other hand, is merely required to manufacture and sell the products to a marketing/brand-owning company without undertaking any AMP expenditure. d) LHCC working under the very same business model has been showing consistent growth in net profit ratio even after expiry of its tax holiday under section 80IC of the Act w.e.f., assessment year 2020-21, resulting in payment of significant income tax, as tabulated herein below (since KC has already closed its business w.e.f. May-2017, its results are not being compared): S. No. Assessment Year Net Profit Ratio (in %) Whether eligible for deduction u/s 80IC ? 1. 2016-17 58.28 Yes 2. 2017-18 66.00 Yes 3.. 2018-19 58.50 Yes 4 2019-20 65.54 Yes 5. 2020-21 66.88 No 6. 2021-22 64.90 No 7. 2022-23 56.08 No 8. 2023-24 56.93 No 9. 2024-25 54.66 No....
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.... has been made on account of allocation of AMP expenses. i) In fact, in para 12.3, AO admits that without the brand name products manufactured by LHCC and KC would not be able to fetch the higher AMPAO observed, "If the finished products of LHCC and KC are sold in open market, it is certain that without the brand name of "Lotus, they would not have able in jetching this much high MRP of the finished products". Having himself admitted this fact, considering that the brand name "Lotus" and also the secret formulation to manufacture the products is admittedly owned by the assessee, where was the question of any part of the AMP expenditure been necessarily borne by the manufacturing entities. For the aforesaid cumulative reasons, the disallowance of proportionate AMP expenses was correctly deleted by the CIT(A) and the grounds of appeal raised by the Department ought to be dismissed 23. Heard the parties and perused the material available on record. The assessee is owned the "LOTUS" brand which is established and well-known brand in the field of Skin Care and cosmetic products. The assessee since beginning of the proceedings claimed that it had got manufactured the....
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....itive market of consumer products. A contract manufacture, on the other hand, is merely required to manufacture and sell the products to a marketing/ brand-owning company based on orders received from the marketing company. g. Therefore, the comparison between the gross profit and/ or net profit to sales ratio of a marketing company like the Appellant with that of the contract manufacturing entities like LHCC and KC is not logical. h. Therefore, the basis of drawing adverse inference in the assessment order by undertaking a comparison between the net profit to sales ratio of the appellant vis-à-vis that the two contract manufactures to come to conclusion that part of the AMP expenses should have been allocated to the two contract manufactures is not sustainable. i. The gross profit and net profit to sales ratio of the appellant and the contract manufacturing entity remained the same even after the tax holiday period is over. 24. On careful consideration of the facts of the case and observations made by Ld. CIT(A), we find that Ld. CIT(A) not only considered the fact that assessee is sole owner of the brand 'LOTUS' but also considered the fact th....
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....tandis applied to the present appeal in ITA No.2443/Del/20 for AY 2014-15. Accordingly, all the grounds of appeal taken by the revenue are dismissed. 29. In the result, the Appeal of the Revenue in ITA No.2443/del/2025 is dismissed. ITA No.2444/Del/2023 for Assessment Year 2015-16. 30. In the present appeal of the revenue, Grounds of appeal No. 1, and 2 to 10 are in relation to disallowance made out of various expenses claimed towards Advertisements and Marketing expenses where under identical circumstances, the disallowance of similar nature were deleted by ld. CIT(A) and said order is upheld by us in ITA NO. 2442/Del/2023 for AY 2013-14 and dismissed the appeal of revenue. Admittedly the facts are identical and before us, both the parties have relied upon the same arguments and submission as were made in the AY 2013-14 thus, by respectfully following the observations made by us in AY 2013-14 while dismissing the appeal of the revenue which are mutatis mutandis applied to the facts of this appeal, the grounds of appeal Nos. 1, 2, 5 to 10 taken by the revenue are dismissed. 31. Grounds of appeal No.3 & 4 raised by the revenue are with respect to the reduction of additio....
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....tricting the addition u/s 14A at Rs. 2,52,681/- computed by taking average value of those investments only which has yielded exempt income. Accordingly, the order of ld. CIT(A) is hereby upheld on this issue. The Grounds of appeal No. 3 & 4 raised by the revenue are thus dismissed. 36. In the result, appeal of the Revenue in appeal No. 2444/Del/2023 is dismissed. ITA No.2445/Del/2023 for Assessment Year 2016-17. 37. In the present appeal of the revenue, Grounds of appeal No. 1 to 8 are in relation to disallowance made out of various expenses of Advertisements and Marketing expenses where under identical circumstances, same were deleted by ld. CIT(A) and the said order is upheld by us in ITA No. 2442/Del/2023 for AY 2013- 14 by dismissing the appeal of revenue. Admittedly, facts are identical and before us, both the parties have relied upon the same arguments and submission as made in AY 2013-14 thus, by respectfully following the observations made by us in AY 2013-14 while dismissing the appeal of the revenue which are mutatis mutandis applied to the facts of this appeal also, grounds of appeal Nos. 1 to 8 taken by the revenue are dismissed. 38. Grounds of appeal No. 9 ....
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....3-14 thus, by respectfully following the observations made by us in AY 2013-14 while dismissing the appeal of the revenue which are mutatis mutandis applicable to the facts of this appeal also, grounds of appeal Nos. 1 to 7 taken by the revenue are dismissed. 43. Grounds of appeal No. 8 to 10 raised by the revenue are with respect to the confirming the addition of Rs. 20,18,119/- made u/s 14A of the Act r.w. Rule 8D of the Rules as against the addition of Rs. 1,54,06,079/- made by the AO. 44. Heard both the parties and perused the materials available on record. The claim of the assessee is that before invoking provisions of section 14A, AO has not recorded satisfaction whereas Ld. CIT(A) rejected this plea of the assessee and uphold the addition made u/s 14A to Rs. 20,18,119/- as against Rs. 1,54,06,079/- made by AO by holding that only that investment which yielded exempt income should be considered for making computation of the addition in terms of Rule 8D of the IT Rule, 1962 by placing reliance on the judgment of hon'ble Apex court in the case of CIT Vs. Oil Industry Development Board reported in 103 Taxmann.com 326 (SC) and of Hon'ble Delhi High Court in the case of ACB ....