INCOME TAX ACT, 1961

Section 143(3)

Assessment - Assessment under section 143(3) - Lump sum disallowance out of the expenses claimed by assessee - No specific defect or bogus vouchers observed by AO

Assessee was a trust engaged in imparting education and running an educational institute for which it was granted certificate under section 10(23C)(vi). AO made disallowance of revenue expenses claimed by assessee amounting to Rs. 50 lakhs alleging that the expenditure shown by assessee was on higher side/ excessive. Assessee pleaded that when income of assessee was exempt from tax what it would make a difference about the claim of expenditure. Held: Assessee had discharged its complete onus producing and appearing in both the proceedings before AO and CIT(A). Not only that entire addition was made purely on the basis of assumptions and surmises was purely devoid of any merit. Assessee had maintained regular books of account, which were audited by an independent Chartered Accountant, in his report the auditor nowhere discussed any defects in the set of records maintained by assessee, the books were presented before AO in original as well as in remand proceedings, no specific defect or bogus vouchers/bills were observed. Therefore, lump sum disallowance at Rs. 50,00,000 out of all the expenses could not be sustained.

Relied:Soni Hospitals Pvt. Ltd. v. Asstt. CIT ITA No.756/JP/2019 dt. 8-4-2021 (Jaipur ITAT) : 2021 TaxPub(DT) 2131 (Jp-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2016-2017

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