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"1. That on the facts and circumstances of the case, Ld. CIT(A) erred in directing the A.O. to delete the addition of Rs.12,32,996/- on account of unaccounted receipts from National Dairy Development Board without appreciating the fact that the AO made such M/s. Keventer Agro Ltd. AY 2000-01, 2003-04 & 2005-06 addition on the basis of materials on record and explanation offered by the assessee company."

3. Briefly stated facts are that the assessee company is engaged in the business of manufacturing and selling of fruit juice under the trade name of Frooti and also mineral water under the trade name of 'Bailley' both as licencee/franchisee of Parle Agro (P) Ltd., Mumbai. The assessee company also carries out packing of Dhara oil at its factory premises situated at Fateabad, P.O. Barasat, North 24 Parganas, West Bengal on behalf of Dhara Vegetable Oil & Food Co. Ltd. Barasat. The assessee company is also running a milk dairy at Barasat, Kolkata under the name and style of Metro Dairy Ltd. in term of joint venture with W.B. State Cooperative Milk Producers Federation Ltd. (in Short WBSCMPFL). In the relevant assessment year, assessment was framed by the AO u/s. 143(3) of the Act after verifying the books of account, bank statements and other documents. Subsequently, the AO issued notice u/s. 148 of the Act and assessment was framed u/s. 147 read with section 143(3) of the Act. As regards to this issue of unaccounted receipts added by AO, the facts are that the assessee company carries on activities of packaging of Dhara Oil on behalf of Dhara Vegetable Oil & Food Co. Ltd. The assessee during the relevant assessment year credited its P&L Account with a sum of Rs.1,20,27,912/- by way of packaging charges as per Schedule 11 of the audited accounts received/receivable from NDDB in respect of packaging activity carried on by them on their behalf. The assessee claimed TDS and filed TDS certificates, during the course of assessment proceedings, wherein th figure of receipts is at Rs.1,32,60,908/-. The assessee before the AO claimed that the assessee company has credited a sum of Rs.1,20,27,912/- in its audited P&L Account under the head packaging charges. After considering the packaging charges relating to opening and closing stock of packaged milk, which practise was consistently followed by assessee, it was explained that the following two amounts do not form part of packaging charges receipt in the sum of Rs.1,20,27,912/- as credited in the P&L Account under Schedule 11 due to the reasons as under:

"(6) I have considered the submission of the appetlant and perused the assessment order.

I have also gone through the tetter dt. 15/11/2002 ìssued by Parle Agro (P) Ltd sent to appellant being Note on Scooby Doo, copy of letter dt. 24/9/2002 issued by Parle to its Franchisees on Modalities of consumer offer on Frooti 200 ml., details of expenses made on account of Scooby Doo, details of sales during the Scooby Doo period and calculation of Scoobi Doo promotion and details of payments of Rs.49,44,199/- to Parle Agro Pvt. Ltd. On careful consideration of the facts and on perusal of several documents and M/s. Keventer Agro Ltd. AY 2000-01, 2003-04 & 2005-06 details as produced before the AO in the course of assessment proceedings, I am of the opinion that the AO was not justifìed in disallowing sum of Rs.49,44,199/-. It is observed from the assessment order that it is not the case of the AO that the expenditure incurred by the appellant company was not genuine or it was not incurred for the purpose of ìts business. The AO's contention, that the appellant could not produce any agreement to explain detaíl terms and condition of Scooby Doo scheme, is not correct, because in the course of assessment proceedings the appellant filed copies of letter dt. 24/9/2002 and 15/11/2002 issued by Parle to its franchisees. It is observed that the name of the appellant company is appearing in the said letters as one of the franchisees. Further, the terms and conditions of the scheme and the basis of payment to be made by each franchisees, including the appellant, to Parle Agro is clearly rnentioned in these letters. There was no independent and separate agreerments between Parle Agro Pvt. Ltd and its franchisees, including the appellant for Scooby Doo Scheme. The agreement was between the principal i.e., Parle gro Pvt. Ltd. and Time Warner Entertainment Co. USA for promotion scheme of Frooti and that total expenditure was to be borne by the each franchisees proportionately. It appears that the AO had not gone through the scheme and basis of payment. In the course of assessment proceedings the appellant company also filed the details of sales made duríng Scooby Doo promotion períod and the calculation of payment made to the Parle. As per letter issued by Parle to the appellant it was required to make payment for scheme @ Rs.19/- per case having 27 packs of 200 ml. Frooti juice. During the year under appeal, the appellant dispatched 287156 cases of 200 ml. Frooti-mango drink, out of that 26935 cases remained in closing stock. Thus, net dispatch to the distríbutors was 260221 cases. At the rate of Rs.19/- per case, the appellant- paid sum of Rs.49,44,199/- to Parle under Scooby Doo Promotion Scheme. The appellant company paid sum of Rs.14,73,734/- in the year under appeal and the balance amount of Rs.34,70,465/- was paid to Parle in the next fínancial year. Thus, it cannot be said that the details were not furnished by the appellant. The AO has also mentioned in the order that Parle Agro has not rendered any services the appellant in exchange of payment made by the appellant. I find no merit in the said observation of the AO, because there was no agreement with Parle for rendering any services to the appellant under Scooby Doo Scheme. The whole scheme was to promote sale of Frooti- mango juice and appellant had made payment to Parle as per agreement between Parle and Time Warner, USA. Parle also provided the promotional material to the appellant. In the assessment order the AO has further mentioned in the ledger account there is no mention of supply of stickers and tattoos etc. by Parle to the appellant. I do not agree with the observation of the AO because it is not known as to how there would be mention of supply of stickers and tattoos to the appellant in the ledger account. It is a common phenomenon that in todays corporate world, a lot importance is given on advertisement to promote sale of their brands and products. The expenditure on such advertisement is either borne by the principai in its books of account and in turn the princìpal recovers the expenditure from its franchisees by increasing cost of its brand and product as in the case of Coca-cola or the principal recovered the expenditure directly from its franchisees on proportionate basis as done in the case of appellant. In view of above, I am of the considered opinion that the appellant company had made payment of Rs.49,44,199/- to Parle on account of Scooby Doo promotion scheme, wholly and exclusively for the purpose of its business and that the claim made by the appellant is genuine and allowabie to him in the year under appeal. The AO is directed to delete disallowance of Rs.49,44,199/-. The ground nos. 2, 3 and 4 are allowed."