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| The Tax Publishers2020 TaxPub(DT) 3808 (Jp-Trib) INCOME TAX ACT, 1961
Section 37(1)
In view of evidences furnished by assessee company running hospital discount allowed to patients could not be disallowed on the ground that when company was in losses, it was not justifiable to allow discount to patients. It was so, because AO could not sit in the arm's chair of businessman and dictate the terms at which business was to be conducted.
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Business expenditure - Discount allowed to patients - Disallowance on the ground of loss incurred by assessee -
Assessee, a Private Limited Company running hospital, claimed deduction of discount allowed to patients. AO disallowed deduction on the ground that when company was in losses it was not justifiable to allow discount to patients. Held: AO transgressed into the arena of businessman. How business was to be conducted was the sole prerogative of assessee. AO could not sit in the arm's chair of businessman and dictate the terms at which business was to be conducted. Relevant details such as patient name, Registration No., period of treatment, Bill No., amount, concession/discount/written-off amount, reason of concession were duly submitted before AO. Even in the past history no disallowance was made and, therefore, discount allowed to patients was allowable as deduction.
REFERRED :
FAVOUR : in assessee's favour
A.Y. : 2006-07
INCOME TAX ACT, 1961
Section 40A(2)(b)
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