JCIT, (OSD), CIR-21, KOLKATA, KOLKATA vs. M/S AXIOM ESTATE ADVISORY SERVICE PVT. LTD., KOLKATA

The Revenue’s next grievance seeks to revive assessee’s business promotion expenditure disallowance of ₹83,52,600/- made in assessment order. Learned Departmental Representative takes us to pages 2 & 3 of the assessment order indicating the assessee to have filed all the relevant details through post under the head “expenditure towards business promotion for India properties” The Assessing Officer invoked the impugned disallowance on the ground that relevant necessity or business expediency of the said expense remained unexplained. All this resulted in the impugned disallowance. A.Y. 2011-12 JCIT(OSD), Cri-2(1) Kol. Vs. M/s Axiom Estate Advisory Services Pvt. Ltd. Page 3 4. The CIT(A)’s order in para 4.3 holds the Assessing Officer to have made the impugned disallowance without any examination or verification. He is of the view that the assessee’s identical expenses stand accepted in preceding and succeeding assessment years. Learned Departmental Representative vehemently contends during the course of hearing that Assessing Officer had rightly disallowed the impugned business promotion expense on account of assessee’s failure in filing its correspondence explanation. We find no substance in Revenue’s instant argument. Learned counsel take us to assessee’s paper book pages 42 to 107 indicating it to have incurred the impugned expenditure in case of payees M/s Axiom Estates USA Income, Axiom Holdings Ltd., Dubai, UAE, Google India Pvt. Ltd., Axiom Estates Advisory Services Pvt. Ltd. and others. All the said payments have been subjected to TDS deduction as well; wherever necessary. Relevant services in question appear to be mainly of in the nature of advertisement and display of hoardings. The assessee has complied with the relevant statutory provision u/s. 195 of the Act as well. This crucial documentary evidence has gone unrebutted from the Revenue side. Its only case as already stated hereinabove is that assessee could not explain the relevant business expediency. We observe in this backdrop that assessee had to incur the impugned expenditure for the purpose adverting its properties in India and abroad for garnering better revenue. Learned Departmental Representative fails to dispute the fact that the Assessing Officer had not issued any notice to either the assessee or any of the corresponding payees to verify the relevant details. This appears to be precise reason for the CIT(A) for deleting the impugned disallowance. We therefore affirm the CIT(A)’s action under challenge granting relief to the assessee qua the instant issue. Revenue fails in its second substantive ground as well.

This leaves us to Revenue’s third and last substantive ground pleading that CIT(A) has erred in law as well s on facts in deleting office maintenance expenses disallowance made by the Assessing Officer to the tune of ₹22,57,227/-. We notice herein as well that Assessing Officer invoked the impugned disallowance alleging that assessee to have filed its details through post qua payment made to M/s Desert Dunes International Company on account of office maintenance without any evidence in support. The CIT(A) reverses the same on the ground that the Assessing Officer has