Case Law Details
New Delhi Tyre House Vs ACIT (ITAT Delhi)
In this case a Ground is on account of confirmation of disallowances out of telephone tours, and other expenses including depreciation on the car stating that involvement of the personal element of the partners of the firm cannot be ruled out. Both the lower authorities have confirmed the disallowances on that account.
On careful consideration and after hearing both the parties we find that the ld AO has made an ad hoc disallowances on this expenditure without pointing out any element of such personal expenditure. During the course of assessment, proceedings, the assessee has given complete details to the various queries raised by the AO. Ld AO has failed to point out any evidence of incurring personal expenditure of partners in the books of account of the partnership firm. Thus, the above disallowance made by AO was purely on adhoc basis without any evidences of personal expenditure of partners claimed as deduction by assessee. The ld CIT (A) has also confirmed the same without giving any reason. As the adhoc disallowances without any evidence is cannot be upheld, therefore, we reverse the orders of the lower authorities and direct the ld AO to delete the disallowances of 1/10th of such expenditure of Rs. 1,75,679/-.
FULL TEXT OF THE ITAT JUDGEMENT
1. These are the cross appeals filed by the assessee as well as Ld ACIT circle 54 (1) New Delhi for assessment year 2012-13 against order of the CIT appeals – 18 New Delhi dated 15 2 2017.
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