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by the assessee towards advertisement and marketing expenses to the agents located in Cyprus and UK have not reached their logical destination i.e., advertising agencies located in Ukraine. During the course of search, original unsigned invoices of foreign companies raised in the name of the assessee towards advertisement expenses incurred in Ukraine were found. The search officials examined Shri Binod Kumar, CMD of the company and Shri C.M.P. Singh, director of the company. However both of them gave evasive replies only. Accordingly the AO expressed the view that Shri Binod Kumar and Shri CMP Singh have not co-operated with the department properly. Besides the adverse observations of DDIT (Inv), the Assessing Officer has also stated that several rubber stamps of the foreign companies were found in the assessee's premises. The aggregate amount of overseas marketing/business promotion expenses claimed by the assessee is tabulated by the Assessing Officer as under:-

(h) Shri Binod Kumar, the Managing director and Shri CMP Singh, the director have given evasive replies in the sworn statement. They could not clarify the factual aspects.

M / s . G e n o m B i o te c h P v t. L td .

(i) The advertisement companies located in UK have address of its accountant. Their accounts did not depict any expenditure towards salary and rent. Shri Binod Kumar and his wife were directors of those UK based companies.

23. The Ld D.R, however, strongly supported the orders passed by Ld CIT(A). He submitted that the revenue has filed written submissions on 29.07.2016, M / s . G e n o m B i o te c h P v t. L td .

wherein a detailed analysis of various deficiencies pointed out by the assessing officer were summarized. He also furnished supplementary written submissions on 04-01-2018. He submitted that the Cyprus and UK advertisement companies are controlled by Shri Binod Kumar, the Managing director of assessee-company. In turn, they have claimed to have carried out advertisements through entities located in Ukraine. However the investigation done by the department through their Foreign Tax division and the income tax authorities of Ukraine revealed that the so called Ukrainian entities did not have any connection with Cyprus and UK advertisement companies. Though the assessee has sent money to Cyprus and UK companies, the report of Ukranian tax authorities show that the money has not reached logical destination. He further submitted that rubber stamps found during the course of search operations, the statements given by Shri Sanjeev Kumar and Shri Anupam, evasive replies given by the directors of the assessee company, absence of agreements, variation in signatures, report of Ukranian tax authorities etc. clearly show that the assessee has diverted funds of the assessee company to abroad under the garb of advertisement expenses.

(a) Though the advertisement expenses were booked on the basis of invoices raised by Cyprus and UK companies, yet they did not have supporting evidences in the form of advertisement materials.

(b) The director Shri C.M.P Singh and also the CMD Shri Binod Kumar gave evasive replies in the statement taken u/s 132(4) of the Act.

(c) The search team found the rubber stamps of foreign companies with the assessee, which has created doubt in the minds of revenue officials about the genuineness of bills.