Case Law Details
M/s. Talbros Engineering Ltd. Vs ACIT (ITAT Delhi)
Assessee had made a payment of sum of Rs.5,75,860/- for participation in exhibition to M/s. Messee Franfurt Trade Fairs India (P) Ltd. for a stall in the international trade fair for the automobile industry. The payment made by the assessee is not in dispute which is evident from the letter written by M/s. Messee Franfurt Trade Fairs (P) Ltd., the copy of which is appearing at page 2 of the paper book and also the copy of invoice and receipt which are appearing at pages 73 and 74 of the paper book. When the payment of participation for exhibition purpose has been made in this year then ostensibly such a payment is revenue in nature incurred for the purpose of business, then the same has to be allowed in the year in which it has been incurred, because for participating in the exhibition it was essential that payment has to be made in advance even if such an exhibition of international trade fair was to be held in the next Assessment Year. Hence, the expenditure incurred cannot be disallowed on this ground. Accordingly, we agree with the contention of the learned counsel that the exhibition expenses paid by the assessee in this year has to be allowed as business expenditure and thus, the ground raised by the assessee on this score is allowed.
Business expenditure cannot be allowed because the items distributed are more of a personalized in nature.
Though assessee has given the list of the item distributed to various customers, however, nowhere it is borne out from the records as to whether distribution of gold and diamond ring and chains were part of the sales promotion activities. Neither any pamphlet of any scheme of sales promotion has been filed nor has any business purpose been shown specifically when the items distributed are more of a personalized in nature. In absence of any proper evidence to demonstrate that these items were actually used for business purpose, we hold that Assessing Officer was far more reasonable in disallowing only 10% of the said expenditure. Accordingly, ground raised by the assessee on this score is dismissed.
FULL TEXT OF THE ITAT JUDGMENT
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