Rushil Décor Ltd. Vs ACIT (ITAT Ahmedabad)
ITAT Ahmedabad deleted disallowance of sales promotion expenditure since disallowance constitutes small percentage as compared to turnover of the assessee and also there is no allegation of expenditure incurred in cash.
Facts- Assessee, a manufacturer of laminates and allied products, incurred sales promotion expenses amounting to Rs. 48,28,256/- during AY 2016-17. These expenses were grouped under the head “Sales Commission,” which amounted to Rs. 5,11,70,910/- in total. The case of the assessee was selected for scrutiny assessment by the tax authorities. AO disallowed the entire amount claimed under “sales promotion expenses”. CIT(A) partly allowed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that looking into the turnover of the assessee company and the aforesaid disallowances constituting a small percentage of the turnover of the assessee company, looking into the fact that with regards to first disallowance there is no allegation of any expenses having been incurred in cash and the fact that Ld. CIT(A) also did not ask the assessee to produce the balance invoices before confirming the addition, we are of the considered view that in light of the assessee’s facts for this assessment year, no disallowance is called for.
