DCIT, CENTRAL CIRCLE-8(1), MUMBAI, MUMBAI vs. SHREYA LIFE SCIENCES PRIVATE LIMITED, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER)

ITA No. 1944/MUM/2025 Assessment Year: 2018-19

DCIT, Central, Circle-8(1), Shreya Life Sciences Private Mumbai, Room No. 656, 6th Limited, 301/A, Shreya House, Vs. Floor, Aayakar Bhavan, M.K. Pereira Hill Road, Andheri (East), Road, Mumbai - 400020 Mumbai - 400099, Maharashtra. Maharashtra. PAN NO. AADCS 9890 C Appellant Respondent

Assessee by : Ms. Ridisha Jain (Virtually Present) Revenue by : Shri Ajit Pal Singh Daia, (Sr. AR)

Date of Hearing : 29/04/2026 : 21/05/2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

This appeal by the Revenue is directed against order dated 23.01.2025, passed by the learned Commissioner of Income-Tax (Appeals)–50, Mumbai [in short, “the Ld. CIT(A)”], for Assessment Year (in short ‘A.Y.’) 2018–19, whereby the Revenue has assailed the partial relief granted to the assessee in respect of addition on account of alleged bogus purchases as well as deletion of ad-hoc

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disallowance made under the head “business promotion expenses. disallowance made under the head “business promotion expenses. disallowance made under the head “business promotion expenses. The relevant grounds raised are reproduced as under: The relevant grounds raised are reproduced as under: The relevant grounds raised are reproduced as under:

“1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in restricting the disallowance made on account of Rs. 13,00,000/- claimed erred in restricting the disallowance made on account of Rs. 13,00,000/ erred in restricting the disallowance made on account of Rs. 13,00,000/ by the assessee to have been made from Rathi Style and Textile Pvt. Ltd. to the by the assessee to have been made from Rathi Style and Textile Pvt. Ltd. to the by the assessee to have been made from Rathi Style and Textile Pvt. Ltd. to the extent of Rs. 3,25,000/ 5,000/- which had been found by the Investigation Wing to be which had been found by the Investigation Wing to be merely an accommodation entry provider during the course of search action on merely an accommodation entry provider during the course of search action on merely an accommodation entry provider during the course of search action on the One World Group of entities? the One World Group of entities? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance made of Rs. 13,00,000/ ed in confirming the disallowance made of Rs. 13,00,000/ ed in confirming the disallowance made of Rs. 13,00,000/- only to the extent of Rs. 3,25,000/- despite the fact that Shri Gopal Bhattar, the director of Rathi despite the fact that Shri Gopal Bhattar, the director of Rathi despite the fact that Shri Gopal Bhattar, the director of Rathi Style and Textile Pvt Ltd, had admitted in his statement on oath u/s 131 of the Style and Textile Pvt Ltd, had admitted in his statement on oath u/s 131 of the Style and Textile Pvt Ltd, had admitted in his statement on oath u/s 131 of the Act, during the search action on One world Group entities, that the said concern earch action on One world Group entities, that the said concern earch action on One world Group entities, that the said concern was one of the concern which were managed and operated by him which were was one of the concern which were managed and operated by him which were was one of the concern which were managed and operated by him which were indulging in providing accommodation entries? indulging in providing accommodation entries? 3. Whether on the facts and circumstances of the case and in law, the Ld. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) Whether on the facts and circumstances of the case and in law, the Ld. erred in deleting the disallowance made out Business Promotion Expenses for an erred in deleting the disallowance made out Business Promotion Expenses for an erred in deleting the disallowance made out Business Promotion Expenses for an amount of Rs. 2,37,70,750/ amount of Rs. 2,37,70,750/- (Total Rs. 9,50,82,536/-) since the assessee was ) since the assessee was not able to substantiate the same during the assessment proceedings? not able to substantiate the same during the assessment proceedings? not able to substantiate the same during the assessment proceedings? 4. The appellant craves The appellant craves leave to add to, alter, amend, modify and / or delete any leave to add to, alter, amend, modify and / or delete any or all of the above said grounds of appeals, the appellant reserves its right to file or all of the above said grounds of appeals, the appellant reserves its right to file or all of the above said grounds of appeals, the appellant reserves its right to file further submissions in the appeal. further submissions in the appeal.

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amounting to Rs.13,00,000/ amounting to Rs.13,00,000/- from M/s. Rathi Style and Textile Pvt. from M/s. Rathi Style and Textile Pvt. Ltd., an entity stated to be controlled by accommodation entry Ltd., an entity stated to be controlled by accommodation entry Ltd., an entity stated to be controlled by accommodation entry operators unearthed during the course of search proceedings operators unearthed during the course of searc operators unearthed during the course of searc conducted in the case of One World Group entities. Consequent conducted in the case of One World Group entities. Consequent conducted in the case of One World Group entities. Consequent thereto, proceedings under thereto, proceedings under Section 148A(d) of the Act on Section 148A(d) of the Act on 31.03.2022 followed by notice under Section 148 of the Act were 31.03.2022 followed by notice under Section 148 of the Act 31.03.2022 followed by notice under Section 148 of the Act initiated and reassessment came to be framed initiated and reassessment came to be framed on 28/03/2023 on 28/03/2023 u/s 147 read with 143(3) 147 read with 143(3) of the Act. The AO concluded the re of the Act. The AO concluded the re- assessment and made following two additions to the assessed assessment and made following two additions to the assessed assessment and made following two additions to the assessed income:

Rs.13,00,000/- (i) An An addition addition of of on on account account of of unexplained/bogus purchases; and unexplained/bogus purchases; and hoc disallowance of Rs.2,37,70,750/ 2,37,70,750/- (computed @ (ii) An ad-hoc disallowance of 20%) out of the total Business Promotion Expenses claimed. 20%) out of the total Business Promotion Expenses claimed. 20%) out of the total Business Promotion Expenses claimed.

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Expenses. Dissatisfied with these deletions, the Revenue has Expenses. Dissatisfied with these deletions, the Revenue has Expenses. Dissatisfied with these deletions, the Revenue has approached this Tribunal by way of the present appeal. approached this Tribunal by way of the present appeal. approached this Tribunal by way of the present appeal. 4. Ground Nos.1 and 2 relate to the addition on account of Ground Nos.1 and 2 relate to the addition on account of Ground Nos.1 and 2 relate to the addition on account of alleged bogus purchases. purchases. The assessing officer recorded that a The assessing officer recorded that a search operation under Section 132 of the Act was conducted on search operation under Section 132 of the Act was conducted on search operation under Section 132 of the Act was conducted on the "One World Group of Entities" on November 6, 2019, which the "One World Group of Entities" on November 6, 2019, the "One World Group of Entities" on November 6, 2019, revealed that the group was engaged in providing accommodation that the group was engaged in providing accommodation that the group was engaged in providing accommodation entries of purchase and sale bills without actual delivery of entries of purchase and sale bills without actual delivery of entries of purchase and sale bills without actual delivery of underlying goods. The Assessing officer further noted that during underlying goods. The Assessing officer further noted that during underlying goods. The Assessing officer further noted that during said search sworn statement of Shri Gopal Bhattar, Director of M/s said search sworn statement of Shri Gopal Bhattar, Director of M/s said search sworn statement of Shri Gopal Bhattar, Director of M/s Rathi Style and Textile Pvt. Ltd., was recorded under Section 131, Style and Textile Pvt. Ltd., was recorded under Section 131, Style and Textile Pvt. Ltd., was recorded under Section 131, wherein he admitted that his entities were paper companies used to wherein he admitted that his entities were paper companies used to wherein he admitted that his entities were paper companies used to facilitate these entries. facilitate these entries. The Assessing Officer proceeded to disallow The Assessing Officer proceeded to disallow the entire purchases primarily on the basis of statement recorded the entire purchases primarily on the basis of statement r the entire purchases primarily on the basis of statement r from Shri Gopal Bhattar. The Assessing Officer further observed from Shri Gopal Bhattar. The Assessing Officer further observed from Shri Gopal Bhattar. The Assessing Officer further observed that the assessee failed to furnish supporting evidences such as that the assessee failed to furnish supporting evidences such as that the assessee failed to furnish supporting evidences such as transportation details, delivery challans and stock register to transportation details, delivery challans and stock register to transportation details, delivery challans and stock register to substantiate actual movement of goods. substantiate actual movement of goods. 4.1 The Ld. CIT(A), however, upon appreciation of the material A), however, upon appreciation of the material A), however, upon appreciation of the material placed on record, noticed that the assessee had furnished copies of placed on record, noticed that the assessee had furnished copies of placed on record, noticed that the assessee had furnished copies of purchase invoices, ledger accounts and proof of payments made purchase invoices, ledger accounts and proof of payments made purchase invoices, ledger accounts and proof of payments made through banking channels. The assessee consistently maintained through banking channels. The assessee consistently maintained through banking channels. The assessee consistently maintained that the fabrics were purchased for preparation of uniforms for its were purchased for preparation of uniforms for its were purchased for preparation of uniforms for its employees and medical representatives. Taking note of the fact that employees and medical representatives. Taking note of the fact that employees and medical representatives. Taking note of the fact that

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the supplier entity had been found involved in accommodation the supplier entity had been found involved in accommodation the supplier entity had been found involved in accommodation entry activities, yet simultaneously observing that the purchases entry activities, yet simultaneously observing that the purchases entry activities, yet simultaneously observing that the purchases could not be said to be wholly non be said to be wholly non-genuine, the Ld. CIT(A) restricted genuine, the Ld. CIT(A) restricted the disallowance to 25% of the purchase value. the disallowance to 25% of the purchase value. 4.2 Before us, the learned counsel for the assessee reiterated that Before us, the learned counsel for the assessee reiterated that Before us, the learned counsel for the assessee reiterated that all primary documentary evidences supporting the purchases had all primary documentary evidences supporting the purchases had all primary documentary evidences supporting the purchases had already been furnished before the lower authorities and no defect nished before the lower authorities and no defect nished before the lower authorities and no defect therein had been pointed out except absence of third-party therein had been pointed out except absence of third therein had been pointed out except absence of third transportation documents. The learned counsel referred to the transportation documents. The learned counsel transportation documents. The learned counsel paper book pages 28 to34, which are copy of ledger account of said paper book pages 28 to34, which are copy of ledger account of said paper book pages 28 to34, which are copy of ledger account of said party in books of account of assessee, copy of bills issued by said account of assessee, copy of bills issued by said account of assessee, copy of bills issued by said party issued in regular course copy of bank statement through party issued in regular course copy of bank statement through party issued in regular course copy of bank statement through which payment was made to the party. It was submitted that the which payment was made to the party. It was submitted that the which payment was made to the party. It was submitted that the goods in question comprised fabric material intended for uniforms goods in question comprised fabric material intended for uniforms goods in question comprised fabric material intended for uniforms of employees and were transported through the assessee’s own d were transported through the assessee’s own d were transported through the assessee’s own vehicles, which, considering the nature of goods, was commercially vehicles, which, considering the nature of goods, was commercially vehicles, which, considering the nature of goods, was commercially plausible. 5. We have heard rival submission of parties on the issue in We have heard rival submission of parties on the issue in We have heard rival submission of parties on the issue in dispute and perused the relevant material on record. The core issue dispute and perused the relevant material on record. dispute and perused the relevant material on record. requiring adjudication is whether the entire purchases are liable to equiring adjudication is whether the entire purchases are liable to equiring adjudication is whether the entire purchases are liable to be disallowed as bogus as made by the ld AO or whether only an be disallowed as bogus as made by the ld AO or whether only an be disallowed as bogus as made by the ld AO or whether only an estimated profit element embedded therein could be brought to tax estimated profit element embedded therein could be brought to tax estimated profit element embedded therein could be brought to tax as done by ld CIT(A). as done by ld CIT(A).

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5.1 It is a settled principle of ta settled principle of tax jurisprudence that the addition of x jurisprudence that the addition of a pure profit element is justified where an assessee trades in goods, a pure profit element is justified where an assessee trades in goods, a pure profit element is justified where an assessee trades in goods, sells them to third parties, earns an undisclosed profit margin, and sells them to third parties, earns an undisclosed profit margin, and sells them to third parties, earns an undisclosed profit margin, and fails to offer the same to tax. fails to offer the same to tax. In the present case, the assessee has In the present case, the assessee has consistently maintained that the fabrics were procured for internal ly maintained that the fabrics were procured for internal ly maintained that the fabrics were procured for internal consumption towards stitching of uniforms for employees and consumption towards stitching of uniforms for employees and consumption towards stitching of uniforms for employees and medical representatives and not for onward trading. In such a medical representatives and not for onward trading. In such a medical representatives and not for onward trading. In such a factual scenario, the rationale ordinarily adopted in trading cases factual scenario, the rationale ordinarily adopted in trading cases factual scenario, the rationale ordinarily adopted in trading cases for estimating suppressed profit margin may not strictly apply. mating suppressed profit margin may not strictly apply. mating suppressed profit margin may not strictly apply. Significantly, the explanation furnished by the assessee regarding Significantly, the explanation furnished by the assessee regarding Significantly, the explanation furnished by the assessee regarding transportation of transportation transportation of of fabric fabric fabric through its through through its its own vehicles appears own own vehicles vehicles appears appears commercially plausible and cannot be discarded solely for want of commercially plausible and cannot be discarded solely for want of commercially plausible and cannot be discarded solely for want of transport bills. 5.2 However, during the course of hearing, when specific query However, during the course of hearing, when specific query However, during the course of hearing, when specific query was put to the learned counsel for the assessee regarding evidences was put to the learned counsel for the assessee regarding evidences was put to the learned counsel for the assessee regarding evidences relating to stitching of uniforms and distribution thereof amongst relating to stitching of uniforms and distribution thereof amongst relating to stitching of uniforms and distribution thereof amongst employees, it was fairly conceded that such evidences were not employees, it was fairly conceded that such eviden employees, it was fairly conceded that such eviden readily available for verification before the Bench. readily available for verification before the Bench. 5.3 Since the assessee claims actual consumption of the fabrics in Since the assessee claims actual consumption of the fabrics in Since the assessee claims actual consumption of the fabrics in its business operations, the issue whether the goods were in fact its business operations, the issue whether the goods were in fact its business operations, the issue whether the goods were in fact received and utilised can only be conclusively determined upon received and utilised can only be conclusively determined upon received and utilised can only be conclusively determined upon examination of supporting evidences such as records relating to examination of supporting evidences such as records relating to examination of supporting evidences such as records relating to stitching of uniforms, distribution thereof to employees or any other stitching of uniforms, distribution thereof to employees or any other stitching of uniforms, distribution thereof to employees or any other corroborative material evidencing actual delivery and utilisation of corroborative material evidencing actual delivery and utilisation of corroborative material evidencing actual delivery and utilisation of

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fabrics. In our considered view, the matter requires deeper factual In our considered view, the matter requires deeper factual In our considered view, the matter requires deeper factual verification. In the interest of substantial just In the interest of substantial justice and to ensure that ice and to ensure that the assessment is based on verified facts rather than assumptions the assessment is based on verified facts rather than assumptions the assessment is based on verified facts rather than assumptions or incomplete records, we deem it appropriate to set aside the order or incomplete records, we deem it appropriate to set aside the order or incomplete records, we deem it appropriate to set aside the order of the Ld. CIT(A) on this issue. The matter is of the Ld. CIT(A) on this issue. The matter is remanded back remanded back to the file of the Ld. CIT(A) with a file of the Ld. CIT(A) with a direction to grant the assessee a direction to grant the assessee a reasonable opportunity to produce cogent evidence regarding the reasonable opportunity to produce cogent evidence regarding the reasonable opportunity to produce cogent evidence regarding the stitching, delivery, and consumption of uniforms among its stitching, delivery, and consumption of uniforms among its stitching, delivery, and consumption of uniforms among its workforce. The Ld. CIT(A) shall adjudicate the matter afresh in workforce. The Ld. CIT(A) shall adjudicate the matter afresh in workforce. The Ld. CIT(A) shall adjudicate the matter afresh in accordance with law. accordance with law. The ground nos. 1 and 2 of the . 1 and 2 of the appeal of the Revenue are accordingly allowed for statistical purposes. accordingly allowed for statistical purposes. accordingly allowed for statistical purposes. 6. Ground No.3 relates to deletion of ad Ground No.3 relates to deletion of ad-hoc disallowance of hoc disallowance of Rs.2,37,70,750/- made out of business promotion expenses. made out of business promotion expenses. made out of business promotion expenses. The AO, noting the total expenditure under this AO, noting the total expenditure under this head to be of head to be of Rs.9,50,82,536/-, proceeded on a mere presumption that the , proceeded on a mere presumption that the , proceeded on a mere presumption that the expenses incurred by the assessee, being a pharmaceutical expenses incurred by the assessee, being a pharmaceutical expenses incurred by the assessee, being a pharmaceutical company, could involve freebies or benefits extended to doctors and company, could involve freebies or benefits extended to doctors and company, could involve freebies or benefits extended to doctors and medical practitioners attracting disallowance under Section 37 of medical practitioners attracting disallowance under Sect medical practitioners attracting disallowance under Sect the Act read with CBDT Circular No.5/2012 dated 01.08.2012 and the Act read with CBDT Circular No.5/2012 dated 01.08.2012 and the Act read with CBDT Circular No.5/2012 dated 01.08.2012 and made an ad-hoc disallowance of 25% of the total claim. disallowance of 25% of the total claim. disallowance of 25% of the total claim. 6.1 The Ld. CIT(A), after examining the ledger accounts and The Ld. CIT(A), after examining the ledger accounts and The Ld. CIT(A), after examining the ledger accounts and nature of expenditure, recorded a categorical finding that the nature of expenditure, recorded a categorical finding that the nature of expenditure, recorded a categorical finding that the impugned ned ned expenses expenses expenses pertained pertained pertained to to to sales sales sales promotion promotion promotion articles, articles, articles, pamphlets, pamphlets, pamphlets, brochures, brochures, brochures, samples samples samples distributed distributed distributed to to to chemists, chemists, chemists,

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promotional inputs, sales meetings and trade schemes extended to promotional inputs, sales meetings and trade schemes extended to promotional inputs, sales meetings and trade schemes extended to stockiest and trade parties. The appellate authority further noted and trade parties. The appellate authority further noted and trade parties. The appellate authority further noted that the expenditure did not partake the character of gifts, that the expenditure did not partake the character of gifts, that the expenditure did not partake the character of gifts, hospitality or freebies extended to doctors or medical practitioners. hospitality or freebies extended to doctors or medical practitioners hospitality or freebies extended to doctors or medical practitioners Finding no evidence linking the expenditure to prohibited doctor Finding no evidence linking the expenditure to prohibited doctor Finding no evidence linking the expenditure to prohibited doctor freebies, the Ld. CIT(A) deleted the addition, relying on the reebies, the Ld. CIT(A) deleted the addition, relying on the reebies, the Ld. CIT(A) deleted the addition, relying on the jurisdictional precedent of jurisdictional precedent of ACIT v. Arthur Anderson and Co. ACIT v. Arthur Anderson and Co. [2006] 5 SOT 393 (Mum), [2006] 5 SOT 393 (Mum), which affirms that token or which affirms that token or ad-hoc disallowances based on pure conjecture cannot be sustained. disallowances based on pure conjecture cannot be sustained. disallowances based on pure conjecture cannot be sustained.

6.2 Before us also, the assessee furnished breakup of the business so, the assessee furnished breakup of the business so, the assessee furnished breakup of the business promotion expenses and ledger account of the expenses of business and ledger account of the expenses of business and ledger account of the expenses of business promotion demonstrating that the expenditure substantially related demonstrating that the expenditure substantially related demonstrating that the expenditure substantially related to promotional articles, trade incentives, sample distribution and to promotional articles, trade incentives, sample distribution and to promotional articles, trade incentives, sample distribution and marketing support activities carried out in the ordinary course of ting support activities carried out in the ordinary course of ting support activities carried out in the ordinary course of business. Detail of such expenses such expenses is reproduced as under : reproduced as under :

Head of Ext. Nature of Expenses Expenses Amount 1 ADVT-GIVE AWAY ARTICLES GIVE AWAY ARTICLES Gifts/Sales Promotion items given to Gifts/Sales Promotion items given to 3,45,84,747 stockiest/Trade parties 2 ADVT-LEAFLETS, BROCH & LIT LEAFLETS, BROCH & LIT Expenses Expenses related related to to leaflets, leaflets, 69,132, broachers, broachers, pamphlets pamphlets and and other other promotional inputs 3 ADVT-OTHERS Various Various product product purchased purchased for for 3,51,250 samples 4 OTR SELLG & PRO EXPNS OTR SELLG & PRO EXPNS Others - 5 OTR SELLING EXPS OTR SELLING EXPS-MEETINGS Sales meetings at various field level Sales meetings at various field level 36,72,270 6 OTR SELLING EXPS OTR SELLING EXPS-OTHERS Spot Sponsorship given 2,05,487 7 SAMPLES-OWN MANUFACTURE OWN MANUFACTURE Sample Qty given to chemist for Sample Qty given to chemist for 2,01,49,518 promotion 8 SAMPLES-OTHER PURCHASES OTHER PURCHASES Others 49,282 9 REPALC/BRAK/EXPAIRY REPALC/BRAK/EXPAIRY-TRADING Bonus/Free Qty & various scheme Bonus/Free Qty & various scheme 3,60,99,414 given to stockiest Total 9,50,82,536

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6.3 We have analyzed the competing arguments and inspected the We have analyzed the competing arguments and inspected the We have analyzed the competing arguments and inspected the ledger accounts reproduced above. ledger accounts reproduced above. We find considerable force in the We find considerable force in the reasoning adopted by the Ld. CIT(A). reasoning adopted by the Ld. CIT(A). A perusal of the record reveals A perusal of the record reveals that the Assessing Officer has neither brought any cogent ma he Assessing Officer has neither brought any cogent material he Assessing Officer has neither brought any cogent ma on record nor conducted any independent enquiry or gathered on record nor conducted any independent enquiry on record nor conducted any independent enquiry independent material to demonstrate that even a single rupee was independent material to demonstrate that even a single rupee was independent material to demonstrate that even a single rupee was diverted diverted diverted towards towards towards providing providing providing prohibited prohibited prohibited freebies freebies freebies to to to medical medical medical practitioners. The ledger entries clearly establish that the The ledger entries clearly establish that the The ledger entries clearly establish that the expenditures were routine business practices, such as trade ditures were routine business practices, such as trade ditures were routine business practices, such as trade discounts, stockiest schemes, and distribution of literature to schemes, and distribution of literature to chemists, essential for running a pharmaceutical company. The chemists, essential for running a pharmaceutical company. chemists, essential for running a pharmaceutical company. disallowance has been made entirely on conjectures and generalized disallowance has been made entirely on conjectures and generalized disallowance has been made entirely on conjectures and generalized assumptions arising merely from the nature of business carried on ons arising merely from the nature of business carried on ons arising merely from the nature of business carried on by the assessee.

6.4 It is trite law that no disallowance can be sustained on mere It is trite law that no disallowance can be sustained on mere It is trite law that no disallowance can be sustained on mere suspicion, surmise or presumption without there being any suspicion, surmise or presumption without there being any suspicion, surmise or presumption without there being any foundational material supporting such conclusion. The Assessing foundational material supporting such conclusion. foundational material supporting such conclusion. Officer cannot substitute legal proof with suspicion, nor can an Officer cannot substitute legal proof with suspicion, nor can an Officer cannot substitute legal proof with suspicion, nor can an addition be sustained on the bedrock of pure conjecture. Ad-hoc addition be sustained on the bedrock of pure conjecture. addition be sustained on the bedrock of pure conjecture. disallowances, divorced from factual verification, are impermissible disallowances, divorced from factual verification, are impermissible disallowances, divorced from factual verification, are impermissible in law. Consequently, the CBDT Circular No. 5/2012 Consequently, the CBDT Circular No. 5/2012 Consequently, the CBDT Circular No. 5/2012 has no application to the facts at hand. An application to the facts at hand. An ad-hoc disallowance cannot disallowance cannot stand judicial scrutiny when it lacks an evidentiary foundation. In stand judicial scrutiny when it lacks an evidentiary foundation stand judicial scrutiny when it lacks an evidentiary foundation the present case, the Revenue has failed to controvert the factual the present case, the Revenue has failed to controvert the factual the present case, the Revenue has failed to controvert the factual

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findings recorded by the Ld. CIT( findings recorded by the Ld. CIT(A) that the expenditure represented A) that the expenditure represented normal normal normal business business business promotion promotion promotion expenses expenses expenses incurred incurred incurred wholly wholly wholly and and and exclusively for the purposes of business. exclusively for the purposes of business. We, therefore, find no We, therefore, find no infirmity in the order of the Ld. CIT(A) deleting the impugned ad-hoc infirmity in the order of the Ld. CIT(A) deleting the impugned ad infirmity in the order of the Ld. CIT(A) deleting the impugned ad disallowance. Accordingly, Gro disallowance. Accordingly, Ground No.3 raised by the Revenue und No.3 raised by the Revenue stands dismissed.

Order pronounced in the open Court on ounced in the open Court on 21/05/2026. /05/2026.

Sd/- Sd/ Sd/- (RAHUL CHAUDHARY RAHUL CHAUDHARY) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 21/05/2026 Kunal Kumar, P.S.

Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai