2026 (2) TMI 367

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.... the assessment year (A.Y. for short) 2022-23. 2. At the outset, we will take up departments appeal, being ITA No. 5310/Mum/2025. In ground no. 1, the department has challenged the deletion of addition of Rs. 15,77,52,570/-. 3. Briefly the facts relating to this issue are, the assessee is a resident corporate entity stated to be engaged in the business of organizing and executing entertainment-based events, concerts and theatrical productions. For the assessment year under dispute, the assessee filed its return of income on 25.10.2022, declaring income of Rs. 23,04,51,260/-. The return of income filed by the assessee was selected for scrutiny. 4. In course of assessment proceeding, the Assessing Officer (A.O. for short), while veri....

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.... DR for short) submitted that in course of assessment proceeding, the A.O. after verifying the details had found that expenditure incurred in the impugned assessment year under certain heads are substantially higher than similar expenditure incurred in the subsequent assessment year. He submitted, since the assessee could not furnish any justifiable reason for incurring such higher expenditure, the A.O. in absence of valid evidence disallowed 10% of such expenses. He submitted, ld. First appellate authority relying upon additional evidences, which were not before the A.O., had deleted the disallowance, which is in violation of Rule 46A. 8. Per contra, ld. Counsel appearing for the assessee submitted that though the assessee had furnished....

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....e charges there is increase of 154.93%. Thus, the aforesaid facts and figures clearly demonstrate that the A.O. has selectively picked up the figures where the expenses are higher in A.Y. 2022-23 compared to A.Y. 2023-24, while conveniently overlooking the heads of expenditure under which there is substantial increase in A.Y. 2023-24. 10. On a reading of the assessment order, we have not noticed any adverse observation of the A.O. regarding the deficiency in supporting evidences furnished by the assessee qua the expenses. Merely because in respect of some items of expenditure there is increase in quantum in the impugned assessment year, that by itself cannot be a reason to disallow a part of such expenses, that too, on purely adhoc basis....

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....like Advertisement and Publicity, Venue Higher Charges, Sound Expenses, Lighting Expenses, Décor Expenses, Catering Expenses etc. for organizing the event of Michel Jacson on 1st November 1996 at Mumbai. After examining the submissions of the assessee, the A.O. observed that since the event was organized in A.Y. 1997-98 and loan was taken in F.Y. 1996-97, the assessee cannot claim the interest expenditure in the impugned assessment year. Accordingly, he disallowed assessee's claim. 13. The assessee contested the disallowance before ld. First appellate authority. 14. After considering the submissions of the assessee, in the context of facts and materials on record, ld. First appellate authority being convinced, deleted the disal....