The Tax Publishers2020 TaxPub(DT) 4794 (Del-Trib)

INCOME TAX ACT, 1961

Section 37(1)

Disallowance made by AO of telephone and vehicle maintenance and business promotion expenses by alleging that the said expenses were not related to the business of the assessee without bringing any evidence on record was bad in law and cannot be sustained.

Business expenditure - Allowability - Telephone and vehicle maintenance and business promotion expenses -

AO made disallowance of telephone and vehicle maintenance and business promotion expenses being not related to the business of assessee. Held: AO made the ad hoc additions without reference to any specific instance where the said expenses were incurred for personal purpose. Such disallowance without pointing out any specific defect in the statutorily mandated audited books of the assessee, and with reference to any specific instances where the expenses have been incurred by the assessee but not for business purposes, could not be sustained.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2014-15



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