Case Law Details
ITO Vs Hemant Kr. Das (ITAT Kolkata)
ITAT Kolkata held that reduction of adhoc disallowance of miscellaneous expenditure from 15% to 5% justified as 1st Appellate Authority has exercised discretion in working out the adhoc disallowance.
Facts- Assessing Officer has noticed miscellaneous expenditures under eight heads. These are in the nature of telephone expenses, travelling expenses, loading and unloading expenses, etc. According to the ld. Assessing Officer, the assessee was unable to file complete supporting details, therefore, he disallowed 15% of such expenses on adhoc basis. The ld. 1st Appellate Authority has restricted this disallowance to 5%. Being aggrieved, the present appeal is preferred by the revenue.
Conclusion- We do not find any merit in this ground of appeal raised by the Revenue, because ld. Assessing Officer has himself worked out the disallowance on guess work basis, which was re-appreciated by the ld. 1st Appellate Authority. Two estimated opinions ought not to be substituted with the third opinion. The ld. 1st Appellate Authority has exercised discretion in working out the adhoc disallowance. Therefore, this ground is rejected.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
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