INCOME TAX ACT, 1961

Section 37(1)

Business expenditure - Allowability - Godown rent -

Assessee claimed expenditure on account of godown rent. AO made disallowance of same on the ground that assessee had neither filed copy of rent agreement in support of tenancy nor filed a confirmation in support of the claim. Held: The entire claim of payment of rent cannot be denied when the assessee is utilizing godown for his business purposes. Though the godown has been owned by the father of the assessee, however, the liability to pay rent cannot be denied merely because of relationship between the tenant and the landlord being son and father. Thus, without conducting any enquiry through remand report, the disallowance of the entire claim of godown rent was not justified. Hence, in the facts and circumstance of the case, the issue was remanded for consideration a fresh.