Anand Jhawar, Kolkata V. ITO, WD-34(2), KOLKATA, Kolkata

ITA 1099/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9487 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 30-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-05-2016
• Court: TRIBUNAL
• Department Lawyers: H R SINGH JCI T LD
• Assessee Lawyers: SAUMITRA CHOUDHURY LD
• Keywords: Business expenditure; Retrospective amendment
• Section: 142(1); 37; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,D BENCH KOLKATA BEFORE : SHRI M.BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 1099/KOL/2016 A.Y 2010-11 ANAND JHAWAR VS. I.T.O WARD 34(2), KOLK ATA PAN: ACQPJ9971M [APPELLANT] [RESPONDENT] APPELLANT BY : SHRI SAUMITRA CHOUDHURY, ADVOCATE, LD.AR RESPONDENT BY : SHRI H.R. SINGH, JCI T, LD.DR DATE OF HEARING : 30-11-2016 DATE OF PRONOUNCEMENT : 31-01-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 03-03-2016 PASSED BY THE COMMISSIONER OF INCO ME TAX(APPEALS), 10, KOLKATA FOR THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1) THAT THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-10/KOL IS ARBITRARY, BASED ON SURMISES AND BAD IN LAW AS WELL AS ON FACTS. 2) THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-10/KOL WAS NOT JUSTIFIED IN CONFIRMING DISALLOWANCE/ADDITION OF RS.1 ,46,556/- ON ACCOUNT OF INTEREST PAID ON LOAN WRONGLY MADE BY THE LEARNE D ASSESSING OFFICER. 3) THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-10/KOL WAS NOT JUSTIFIED IN CONFIRMING DISALLOWANCE/ADDITION OF RS.65,150/-ON ACCOUNT OF S ALES PROMOTION EXPENSES. 4) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, ADDITIONS/DISALLOWANCES ARE LIABLE TO BE DE LETED. 5) THAT THE APPELLANT CREAVES THE LEAVE AMEND OR AL TER ANY OF THE ABOVE GROUNDS AND FURTHER TO TAKE ADDITIONAL GROUND OR GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 3. GOING BY THE ABOVE THE ONLY EFFECTIVE GROUNDS AR E GROUND NOS. 2 AND 3 AND REMAINING GROUNDS 1,4 & 5 WHICH NEEDS NO ADJUDI CATION AND ARE DISMISSED. ITA NO. 1099/KOL/2016 ANAND JHAWAR 2 4. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN TRADING IN IRON AND STEEL. THE ASSESSEE FILED HIS RETURN OF INCOME THROUGH ONLINE DECLARING A TOTAL INCOME OF RS.5,98,330/-. UNDER SCRUTINY, NOTICES U/S. 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO WHICH, THE ASSESSEE PRO DUCED BOOKS OF ACCOUNT, LEDGER ALONG WITH BILLS AND VOUCHERS AND BANK STATE MENTS. 5. GROUND NO-2 IS RELATING TO THE ADDITION OF RS.1, 34,100/- MADE FOR VIOLATION OF SECTION 194A OF THE ACT INVOKING THE P ROVISION U/SECTION 40(A)(IA) OF THE ACT. 6. DURING SCRUTINY PROCEEDINGS THE AO FOUND THAT TH E ASSESSEE HAS CREDITED AMOUNTS AS INTEREST IN RESPECT OF FOLLOWIN G PARTIES, WHICH WAS CLAIMED AS DEDUCTION TO AN EXTENT OF RS.1,46,556/- TOWARDS PAYMENT OF INTEREST ON LOANS :- 1) MAA KALI PROJECT PVT. LTD RS.34,000/- 2) ROTOFLEX PRINTING & LAMINATES RS.30,090/- 3) S.K. JHAWAR (HUF) RS.82,466/- 7. ACCORDING TO AO, THE ASSESSEE SHOULD HAVE DEDUCT ED TDS U/S. 194A OF THE ACT AND ACCORDING TO AO FOR WHICH ASSESSEE ADMI TTED THAT THE SAME IS AN ADVERTENT MISTAKE. ACCORDINGLY, THE AO ADDED AN AMO UNT OF RS.1,46,556/- TO THE TOTAL INCOME OF THE ASSESSEE. 8. IN FIRST APPEAL, BEFORE THE CIT-A ASSESSEE CONTE NDED THAT ALL SUCH LOAN CREDITORS TAKEN SUCH AMOUNT RECEIVED FROM THE ASSE SSEE AS THEIR INCOME AND DULY DISCLOSED THE SAME IN THEIR RESPECTIVE RET URNS FILED U/S. 139(1) OF THE ACT AND PAID TAXES THEREON. IN SUPPORT OF HIS C ONTENTION HE RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. 9. THE CIT-A CONFIRMED THE ADDITION MADE BY THE AO ONLY ON THE GROUND THAT THE SAID THREE PAYEES DID NOT FILE THE CERTIFI CATES IN FORM 26A AND OPINED THAT MERE FILING OF RETURNS DOES NOT FULLY E STABLISH THAT THEY DISCLOSED ITA NO. 1099/KOL/2016 ANAND JHAWAR 3 SUCH RECEIPTS AS INCOME AND PAID TAXES THEREON. REL EVANT FINDING OF THE CIT- A IN THIS REGARD IS REPRODUCED HEREIN BELOW:- I HAVE CAREFULLY EXAMINED THE CONTENTIONS OF THE LD A.R THAT THE 2ND PROVISO TO SEC. 40(A)(IA) AS INSERTED BY FINANCE ACT, 2012 WOULD AP PLY IN THE CASE OF THE APPELLANT. ACCORDING TO THE LD.A.R THE 2 ND PROVISION IS CURATIVE IN NATURE INTENDED TO SUPPLY AN OBVIOUS OMISSION, TAKE CARE OF AN UNINTENDED CONSEQUENCE AND MAKE THE SAID SECTION WORKABLE. SEC 40(A(IA) WITHOUT THE SECOND PROVISO RESULTED IN A CASE WHERE THE PAYEE IN RECEIPT OF THE INCOME HAD PAID TAX, AND THEREFORE, HE TOOK THE PLEA THAT THE SECON D PROVISO ALTHOUGH INSERTED W.E.F. 1ST APRIL, 2013 BUT BEING CURATIVE IN NATURE HAS RETROSPECTIVE EFFECT. HOWEVER, I FIND THAT IN THE INSTANT CASE, THE THREE PAYEES HAVE NOT FURNISHED THE REQUI SITE CERTIFICATES IN FORM 26A [SEE RULE 31 ACB] DECLARING THAT THE AT THE TIME OF FILING RETUR N U/S 139, IT HAD TAKEN INTO ACCOUNT THE SAID THE IMPUGNED AMOUNTS WHICH HAD NOT BEEN SUBJECT TO TAX AT SOURCE IN THE HANDS OF THE APPELLANT. MERE FILING OF RETURNS BY THE THREE PAYE ES IN QUESTION, IN MY CONSIDERED OPINION DOES NOT FULLY ESTABLISH THAT THERE IS NO LOSS TO REVENU E AS CONTENDED BY THE LD. A.R BEFORE ME. IN THE SAID CIRCUMSTANCES, I AM NOT INCLINED TO INT ERFERE WITH THE FINDINGS OF THE AO, WHICH ACCORDINGLY STAND CONFIRMED. THIS GROUND TAKEN BY THE APPELLANT-ASSESSEE STAN DS DISMISSED. 10. BEFORE US THE LD. AR REITERATED THE SAME SUBMIS SION AS MADE BEFORE THE CIT-A AND URGED TO REMAND THE ISSUE TO THE FILE OF THE AO FOR VERIFICATION OF THE SAID THREE PAYEES WHETHER THEY DISCLOSED SUC H INTEREST INCOME IN THE THEIR RESPECTIVE RETURNS OF INCOME 11. ON THE OTHER HAND, THE LD.DR SUBMITS THAT THE A O HAS TO VERIFY THE RETURNS OF INCOME OF SUCH THREE PAYEES WHETHER THEY HAVE FILED FORM 26A. 12. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE FILED THE COPIES OF RETUR NS OF INCOME OF SUCH THREE (3) CREDITORS BEFORE THE CIT-A. BUT THE CIT-A CONFI RMED THE IMPUGNED ADDITION MADE BY THE AO ONLY ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE THE FORM NO. 26A, WHICH IS REQUIRED TO BE F ILED BEFORE HIM TO CONFIRM WHETHER SUCH PAYEES OFFERED SUCH RECEIPTS T O TAX OR NOT. TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE LD.AR AND IN T HE INTEREST OF JUSTICE , WE ARE OF THE VIEW THAT THE ISSUE SHALL GO BACK TO THE AO FOR VERIFICATION OF THE SAME AND KEEPING IN VIEW OF THE PRINCIPLE ENUNCIATE D BY THE HONBLE HIGH COURT OF DELHI SUPRA, WE ARE OF THE VIEW THAT THE IF THE CONCERNED PAYEE (S) HAS TAKEN INTO ACCOUNT THE RELEVANT SUM AS RECEIVE D FROM ASSESSEE TOWARDS PAYMENT OF INTEREST FOR COMPUTING INCOME IN THEIR RETURNS OF INCOME FURNISHED U/S. 139 OF THE ACT AND HAS PAID TAX DUE ON THE INCOME DECLARED IN SUCH RETURN, WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF CIT(A) TO THE ITA NO. 1099/KOL/2016 ANAND JHAWAR 4 EXTENT CONFIRMING THE DISALLOWANCE MADE BY THE AO U/S. 40(A)(IA) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDI NG THE SAME AFRESH IN THE LIGHT OF THE SUBMISSIONS OF THE ASSESSEE. THE ASSES SEE SHALL BE AT LIBERTY TO FILE REQUISITE EVIDENCES, IF ANY, TO SUBSTANTIATE I TS CLAIM. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS E. 13. GROUND NO. 2 IS RELATING TO CONFIRMATION OF DIS ALLOWANCE OF RS.65,150/- ON ACCOUNT OF SALES PROMOTION EXPENSES. 14. DURING THE SCRUTINY PROCEEDINGS, THE AO FOUND T HAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.77,724/- ON ACCOUNT OF SAL ES PROMOTION EXPENSES IN HIS PROFIT AND LOSS ACCOUNT. OUT OF WHICH AN AMO UNT OF RS.65,150/- PAID IN FAVOUR OF ORDINANCE CLUB. ACCORDING TO AO, THE ASSE SSEE ADMITTED THAT SUCH PAYMENT WAS MADE TOWARDS CLUB MEMBERSHIP AND CLAIME D SUCH EXPENSES INCURRED FOR THE PURPOSE AND BENEFIT OF HIS BUSINE SS ACTIVITIES. THE AO TREATED THE SAME AS ASSESSEES PERSONAL EXPENDITURE IN NATURE AND ADDED THE SAME TO HIS TOTAL INCOME. 15. BEFORE THE CIT-A THE ASSESSEE CONTENDED THAT TH E MEMBERSHIP OBTAINED TO AVAIL THE FACILITIES OF SUCH CLUB FOR MEETING AND AFFORDING ENTERTAINMENT WITH BUSINESS ASSOCIATES, WHICH IN TU RN HELPS THE ASSESSEE IN PROMOTING HIS BUSINESS AND RELIED ON VARIOUS DECISI ONS OF TRIBUNAL AND HONBLE HIGH COURTS. 16. THE CIT-A WAS OF THE VIEW THAT THE ASSESSEE COU LD NOT DEMONSTRATE AS TO HOW THE PAYMENT TOWARDS CLUB MEMBERSHIP WOULD BE NEFIT THE BUSINESS OF ASSESSEE. ACCORDINGLY, HE CONFIRMED THE IMPUGNED AD DITION AS MADE BY THE AO ON THIS ISSUE. 17. THE LD.AR REITERATED THE SAME SUBMISSIONS AS MA DE BEFORE THE CIT-A AND RELIED ON THE DECISIONS OF THE HONBLE HIGH COU RT OF DELHI IN THE CASE OF CIT VS. SAMTEL COLOUR LIMITED DATED 30-01-2009 IN I TA 1152/2008 AND IN ITA NO. 1099/KOL/2016 ANAND JHAWAR 5 THE CASE OF CIT VS. NESTLE INDIA LTD REPORTED IN (2 008) 296 ITR 682(DEL) AND ARGUED THAT THE SUMS PAID TOWARDS CLUB MEMBERSHIP H AS TO BE TREATED AS BUSINESS EXPEDIENCY FOR THE PURPOSE OF BUSINESS AND ALLOWABLE AS DEDUCTION. 18. ON THE CONTRARY, THE LD.DR SUBMITS THAT THE ASS ESSEE ADMITTED BEFORE THE AO THAT THE SAID AMOUNT WAS NO WHERE RELATED TO BUSINESS ACTIVITIES OF ASSESSEE AND ON SUCH ADMISSION, THE AO HAS RIGHTLY ADDED SUCH AMOUNT TO THE TOTAL INCOME ASSESSEE AND SUPPORTED THE ORDERS OF CIT-A AND AO. 19. IN REPLY, THE LD.AR ALSO SUBMITS THAT THE ASSES SEE CANNOT BE PUT TO HARDSHIP THAT IF THE AR OF ASSESSEE BEFORE THE AO A DMITS THE SAME. 20. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE LD.AR OF THE ASSESSEE BEFORE THE A O ADMITTED SUCH AMOUNT WAS NOT AT ALL RELATED TO BENEFIT OF ASSESSEES BU SINESS. THE CIT-A IN HIS ORDER OPINED THAT THE ASSESSEE COULD NOT PRODUCE AN Y EVIDENCE SHOWING THAT THE SAID AMOUNT WAS PAID IN OBTAINING CLUB MEMBERSH IP WAS USED FOR THE BENEFIT OR FOR PROMOTION OF HIS BUSINESS. THE HONB LE HIGH COURT OF DELHI IN THE CASE OF NESTLE INDIA LTD WAS PLEASED TO HOLD THE EXPENSES INCURRED BY THE ASSESSEE THEREIN TOWARDS MEMBERSHIP FEES WAS FOR TH E BUSINESS PURPOSE AND THE RELEVANT FINDING OF THE HONBLE HIGH COURT SUPRA IN THIS REGARD IS REPRODUCED HEREIN BELOW:- WE FIND FROM A PERUSAL OF THE ASSESSMENT ORDER THAT A MEMBERSHIP FEE OF RS. 2 LAKHS WAS PAID BY THE ASSESSEE TO THE MADRAS GYMKHANA CLUB. IN SO FAR AS EXPENSES BY THE ASSESSEE TOWARDS FOOD ETC., ARE CONCERNED, THEY WERE SUBJECT TO DISA LLOWANCE UNDER SECTION 37(2) OF THE INCOME- TAX ACT, 1961. WE HAVE ALSO SEEN OTIS ELEVATOR CO. (INDIA) LTD. V. CIT[1992] 195 ITR 682 (BORN.) WHERE IT APPEARS THAT THE APPELLATE ASSISTANT COMMISSIONER H AD GIVEN A CATEGORICAL FINDING THAT PAYMENTS MADE BY THE ASSESSEE TOWARDS CLUB MEMBERSH IP FEE WAS TO PROMOTE ITS BUSINESS. IT IS TRUE THAT IN SO FAR AS THE PRESENT CASE IS CO NCERNED, THERE IS NO SPECIFIC FINDING THAT THE PAYMENT WAS MADE BY THE ASSESSEE FOR IMPROVING ITS BUSINESS BUT SINCE THE ASSESSING OFFICER HAS ALLOWED A DEDUCTION OF 50 PER CENT. OF RS. 2 LA KHS (THAT IS RS. 1 LAKH) UNDER SECTION 37(2) OF THE ACT, 1961, WE ARE OF THE OPINION, HE DID SO ON THE BASIS THAT THE EXPENDITURE INCURRED WAS FOR BUSINESS PURPOSES, OTHERWISE THE ENTIRE AMOUNT WOULD HAVE BEEN DISALLOWED BY THE ASSESSING OFFICER. CONSEQUENTLY, EVEN THOUGH THERE IS NO EXPLICIT FINDING TO THAT EFFECT, BUT THERE IS AN IMPLICIT ACKNOWLEDGMENT THAT THE EXPENS ES INCURRED BY THE ASSESSEE WAS FOR THE BUSINESS PURPOSES. THEREFORE, WE ARE OF THE OPINION THAT THERE IS NO E RROR IN THE VIEW TAKEN BY THE TRIBUNAL IN CONCLUDING THAT THE EXPENSES INCURRED BY THE ASSESS EE TOWARDS MEMBERSHIP FEE WAS FOR THE BUSINESS PURPOSES AND THAT THE ASSESSEE WAS ENTITLE D TO A DEDUCTION AS CLAIMED. ITA NO. 1099/KOL/2016 ANAND JHAWAR 6 21. IN THE AFOREMENTIONED DECISION, THE HONBLE HIG H COURT FOUND THAT THE AO ALLOWED DEDUCTION OF RS.1,00,000/- AS AGAINST TH E TOTAL MEMBERSHIP FEE OF RS.2,00,000/-, THEREBY, THE AO ACCEPTED THE PAYM ENT OF MEMBERSHIP OF CLUB AS BUSINESS EXPENDITURE AND UPHELD THE FINDING OF THE TRIBUNAL THAT THE EXPENSES INCURRED BY THE ASSESSEE TOWARDS MEMBERSHI P FEE WAS FOR THE BUSINESS PURPOSES. IN THE PRESENT CASE THE LD.AR CO NTENDED THAT THE MEMBERSHIP OBTAINED TO AVAIL THE FACILITIES OF SUC H CLUB FOR MEETING AND AFFORDING ENTERTAINMENT WITH BUSINESS ASSOCIATES, W HICH IN TURN HELPS THE ASSESSEE IN PROMOTING HIS BUSINESS. IN OUR VIEW, TH E PRINCIPLE AS LAID DOWN BY THE HONBLE HIGH COURT SUPRA IS APPLICABLE AND A CCORDINGLY, WE HOLD THAT THE ASSESSEE WAS ENTITLED TO A DEDUCTION AS CLAIMED AND ADDITION MADE THEREON IS LIABLE TO BE DELETED. 22. FURTHER, WE MAY REFER TO THE DECISION AS RELIED ON BY THE LD.AR IN THE CASE OF SAMTEL COLOR LIMITED SUPRA , THE HONBLE HIGH COURT OF DELHI AGREED WITH THE CONCLUSION AS ARRIVED BY THE TRIBUNAL THAT CORPORATE MEMBERSHIP ITSELF MEANT IT WAS FOR THE BENEFIT OF THE ASSESSEE AND NOT FOR ANY PARTICULAR EMPLOYEE AS IT HAD A RIGHT TO NOMINATE AND SUBSTITU TE AN EMPLOYEE AT ANY POINT OF TIME. RELEVANT FINDINGS OF WHICH ARE REPRO DUCED HERE IN BELOW:- 4. SINCE BOTH THE REVENUE AND THE ASSESSEE WERE AG GRIEVED BY THE ORDER OF THE CIT(A) CROSS APPEALS WERE PREFERRED AGAINST HIS ORDER. THE TRIBU NAL AFTER CONSIDERING THE SUBMISSIONS MADE AS WELL AS AUTHORITIES CITED BEFORE IT RETURNED A F INDING OF FACT THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WAS TO OBTAIN CORPORATE MEMBERSHIP OF THE CLUBS WHICH ENTITLED IT TO SPONSOR SPECIFIED NUMBER OF EMPLOYEES TO ENJOY THE BENEFITS OF THE CLUBS FOR WHICH SEPARATE PAYMENTS HAD TO BE MADE. IT FURTHER CONCLUDED THAT THE MEMBE RSHIP BY ITSELF DID NOT CONFER ANY ENDURING BENEFIT ON THE ASSESSEE. THE TRIBUNAL NOTED THE FAC T THAT CORPORATE MEMBERSHIP ITSELF MEANT IT WAS FOR THE BENEFIT OF THE ASSESSEE AND NOT FOR ANY PARTICULAR EMPLOYEE AS IT HAD A RIGHT TO NOMINATE AND SUBSTITUTE AN EMPLOYEE AT ANY POINT OF TIME. IN THESE CIRCUMSTANCES IT CONCLUDED THAT SINCE MEMBERSHIP ALLOWED THE EMPLOYEES TO INTE RACT WITH ITS CUSTOMERS THE EXPENSES WERE FOR BUSINESS PURPOSES AND, THEREFORE, THERE WAS NO REASON TO DISALLOW THE EXPENDITURE EITHER WHOLLY OR IN PART. 5. HAVING HEARD THE LEARNED COUNSEL FOR THE REVENUE AS WELL AS THE ASSESSEE WE ARE OF THE VIEW THAT THE IMPUGNED JUDGMENT OF THE TRIBUNAL DESERVES TO BE UPHELD FOR THE FOLLOWING REASONS:- 5.1 THE EXPENDITURE INCURRED TOWARDS ADMISSION FEE, ADMITTEDLY, WAS TOWARDS CORPORATE MEMBERSHIP. AS CORRECTLY HELD BY THE TRIBUNAL, THE NATURE OF THE EXPENDITURE WAS ONE FOR THE BENEFIT OF THE ASSESSEE. THE BUSINESS PURPOSE BAS IS ADOPTED FOR ELIGIBILITY OF EXPENDITURE UNDER SECTION 37 OF THE ACT WAS THE CORRECT APPROAC H. THIS IS MORE SO IN VIEW OF THE TRIBUNALS FINDINGS THAT IT WAS THE ASSESSEE WHICH NOMINATED T HE EMPLOYEE WHO WOULD AVAIL THE BENEFIT OF THE CORPORATE MEMBERSHIP GIVEN TO THE ASSESSEE. 23. THE HONBLE HIGH COURT AGREED WITH THE TRIBUNAL THAT THE CLUB MEMBERSHIP BY ITSELF DID NOT CONFER ANY ENDURING BE NEFIT ON THE ASSESSE AND ITA NO. 1099/KOL/2016 ANAND JHAWAR 7 THE CORPORATE CLUB MEMBERSHIP ITSELF MEANT IT WAS F OR THE BENEFIT OF THE ASSESSEE AND NOT FOR ANY PARTICULAR EMPLOYEE AS THE ASSESSE HAD A RIGHT TO NOMINATE AND SUBSTITUTE AN EMPLOYEE AT ANY POINT OF TIME AND CONFIRMED THE FINDING OF THE TRIBUNAL THE NATURE OF THE EXPENDITU RE WAS ONE FOR THE BENEFIT OF THE ASSESSE AND FALL UNDER THE ELIGIBILITY OF E XPENDITURE AS PROVIDED UNDER SECTION 37 OF THE ACT. AS DISCUSSED ABOVE, IN THE PRESENT CASE, THE ASSESSEE DEBITED A SUM OF RS.77,724/- UNDER THE HEA D SALES PROMOTION EXPENSES AND CONTENDED BEFORE THE CIT-A THE SAID EX PENSES WERE INCURRED FOR WHOLLY, SOLELY AND EXCLUSIVELY FOR THE PURPOSE AND DURING THE COURSE OF BUSINESS. IN THE LIGHT OF DECISION OF HONBLE HIGH COURT SUPRA AND IN THE FACTS OF THE ISSUE ON HAND, WE ARE OF THE VIEW, THAT THE EXPENDITURE AS CLAIMED BY THE ASSESSEE TOWARDS SALES PROMOTION QUALIFIES FOR BUSINESS EXPENDITURE AND RESPECTFULLY FOLLOWING OF THE DECISIONS SUPRA, WE H OLD THAT THE ASSESSEE IS ENTITLED TO A DEDUCTION AS CLAIMED AND ADDITION MAD E THEREON IS DELETED AND GROUND NO-3 IS ALLOWED. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 -01-2017 SD/- SD/- M. BALAGANESH S.S.VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 31-01-2017 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE: ANAND JHAWAR 14/2 OLD CHINA BAZ AR STREET, ROOM NO. 226, 3 RD FLOOR, KOLKATA- 700 001. 2 RESPONDENT/DEPARTMENT : INCOME TAX OFFICER, WARD 3 4(2), AAYKAR BHAWAN POORVA, 110 SHANTI PALLY, KOLKATA 700 107. 3. CIT, 4. CIT(A), 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS [ TRUE COPY ] BY ORDER ASSTT. REGISTRAR