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| The Tax Publishers2019 TaxPub(DT) 6517 (Pune-Trib) INCOME TAX ACT, 1961
Section 37(1)
Where in spite of the full opportunity being given to AO to examine the books of account produced by assessee, he failed to point out any specific defect qua the commission expense and made an ad hoc addition, said addition could not be sustained.
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Business expenditure - Allowability - Ad hoc addition made by AO on account of sales commission expenses -
AO made an ad hoc addition @10% on account of sales commission expenses claimed by assessee. However, assessee had produced books of account before the AO, who had full opportunity of examining the same and finding out anything adverse before making any addition out of the expenses. Despite that, AO could not point out any specific defect qua the expense and made an ad hoc addition. Held: Since assessee had produced books of account before the AO, who even though had full opportunity of examining the same and finding out anything adverse but had failed to point out any specific defect qua the expense and made an ad hoc addition, therefore, AO was not justified in making ad hoc disallowance out of the commission expense.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2007-08 & 2008-09
INCOME TAX ACT, 1961
Section 37(1)
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