Case Law Details
Manish Kumar Lath Vs CIT(A)-II (ITAT Indore)
Conclusion: Where assessee-director was able to establish the relation between expenditure incurred by credit card with the business of the company in which assessee was a director, the expenses incurred was allowable to that extent.
Held: Assessee was a director of M/s. I Private Limited and the credit card had been provided to meet the expenses. AO disallowed the expenditure on the ground that expenses were for the personal use. It was incumbent upon assessee to prove the nature of expenditure and purpose of the expenditure and correlate with the business of the company. In the present case, assessee had merely made a bald statement. The ledger account belonging to company so submitted spoke of cash credit which required verification by AO, whether such expenditure had any link with the business of company in which assessee was a Director. Therefore, the issue was set aside to the file of AO for a limited purpose to verify the link between the expenses and the business of the company where assessee was the Director. In the event if A.O. found that there was some relation with the business of company and expenditure incurred by assessee, he would allow such expenses and delete the addition to that extent.
FULL TEXT OF THE ITAT JUDGMENT
Appeal by the assessee is directed against order of the CIT(A)-II, Indore dated 12.7.2017 pertaining to the assessment year 2012-13. The assessee has raised following grounds of appeal:
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