Case Law Details
UCB India Private Limited Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that the issue of allowance of sales promotion expenses (including freebies) in the hands of Appellant was debatable and it cannot be said that allowance of deduction of sales promotion expenses by AO resulting in a mistake apparent on record. Thus, in absence of mistake apparent on record, order passed u/s 154 liable to be quashed.
Facts- The present appeal has been preferred against the rectification order passed by the Assessing Officer under Section 154 of the Act assessing total income of the Appellant at INR 36,25,23,522/- as against returned income of INR 20,81,12,869/-after making disallowance of sales promotion expenses of INR 11,30,18,798/-.
Conclusion- Held the issue of allowance of sales promotion expenses (including freebies) in the hands of the Appellant was debatable and required investigation and arguments on facts and in law. Thus, it cannot be said that allowance of deduction of sales promotion expenses by the Assessing Officer resulting in a mistake apparent on record. Therefore, absent mistake apparent on record, the action of the Assessing Officer fell beyond the scope of Section 154 of the Act. Accordingly, order dated 29/01/2016, passed by the Assessing Officer under Section 154 of the Act is quashed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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