INCOME TAX ACT, 1961

Section 37(1)

Business expenditure - Allowability - Low withdrawals for household expenses -

Assessee made withdrawal per month from the account of M/s. S.D in which he was a partner, for household expenses. AO made addition on account of low household expenses holding that withdrawal amount was not sufficient to manage expenses, therefore not acceptable. Held: AO had neither pointed out any cogent and convincing reason nor pointed out any evidence on record to justify his action. In the remand report, AO has justified the addition in question only on the ground that his predecessor has made the said addition. Thus, addition made by AO purely on ad hoc basis without assigning any cogent reason and referring any evidence was required to be deleted.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2013-14

INCOME TAX ACT, 1961

Section 69

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