The Tax Publishers2020 TaxPub(DT) 3405 (Hyd-Trib)

INCOME TAX ACT, 1961

Section 143(3)

Where AO made addition by not allowing expenditure incurred in relation to consultancy receipts shown by assessee for want of documentary proof of expenditure, considering that it was obvious that assessee would have definitely incurred expenditure to earn such income, 50% of the gross consultancy receipts were ordered to be treated as expenditure incurred by assessee for earning income from consultancy services.

Assessment - Additions to income - AO did not allow expenditure incurred in relation to consultancy receipts shown by assessee for want of documentary proof of expenditure -

Issue was as regards addition made by AO due to difference of income stated in Form 26AS and return of income. Held: Assessee contended that claim of expenditure made by him should be considered and appropriate relief may be granted because though he had not maintained proof of expenditure incurred, expenditure was actually incurred by him. It was not in dispute that assessee received amount from his consultancy services. For rendering such services, it was obvious that assessee would have definitely incurred expenditure. Therefore, considering facts and circumstance of case it would be appropriate and just to estimate the expenditure and thereafter determine the taxable income of assessee. Thus, 50% of the gross consultancy receipts were to be treated as expenditure incurred by assessee for earning income from consultancy services.

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. : 2014-15


INCOME TAX ACT, 1961

Section 143(3)

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