The Tax Publishers2020 TaxPub(DT) 4103 (Karn-HC) : (2021) 276 TAXMAN 0215

INCOME TAX ACT, 1961

Section 37(1)

Where expenses incurred by assessee were not properly substantiated with evidence, then disallowance made by AO was called for.

Business expenditure - Ad hoc disallowance - Expenditure not properly substantiated -

AO on the ground that expenses incurred by assessee were not wholly and exclusively incurred for the business purpose and quantification of disallowance was also on higher side, made disallowance of the same on ad hoc basis. Held: Expenditures incurred by the assessee were not directly relatable to each head. Further, assessee was not able to substantiate the claim for expenditure incurred towards business by producing vouchers. Hence, disallowance made on ad hoc basis could not be held as unjustified.

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2005-06



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