Case Law Details
Rajasthan Patrika Private Limited Vs ACIT(ITAT Jaipur)
ITAT Jaipur held that disallowance of marketing and survey expenditure merely because of non-production of the concerned party whose identity is proved is unsustainable in law.
Facts- AO vide order u/s. 143(3) assessed total income at Rs. 2,14,20,940/- by making additions on account of various disallowances including disallowance of Rs. 60,01,635/- on account of Marketing and Survey Expenses out of total expenditure.
In the original assessment proceeding, AO asked the assessee to produce personally certain parties along with their books of accounts, purchase and sale bills and copies of their return of income for A. Y. 2005-06. The assessee could not produce the said persons. Later, the inspector found that the person concerned were not having any connection at the addresses noted in the bills claimed to have been issued by them.
Accordingly, AO concluded that the two parties/concerns to whom the payments were made, was never existing at the address given by the assessee. Based on these findings the AO concluded that the expenses / payments to both of them as bogus and added a sum of Rs. 60,01,635/-.
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