Case Law Details
Metal Cans and Closures Pvt Ltd Vs ACIT (ITAT Lucknow)
ITAT Lucknow held that amount of disallowance of expenditure, on presumption of leakage in the form of expenditure of personal nature, reduced as found that total amount of disallowance by lower authority was excessive and unreasonably high.
Facts- Vide assessment order passed u/s 143(3) of the Income Tax Act, 1961, the assessee’s total income was assessed at Rs.6,28,91,316/- as against returned income of Rs.6,25,16,280/-. Notably, an addition of Rs.3,75,036/- was made on account of disallowance out of expenses under the heads conveyance, loading & unloading expenses, misc. expenses, repair & maintenance, telephone expenses, travelling expenses and vehicle running & maintenance expenses.
CIT(A) confirmed the addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that the disallowance has been made by the Assessing Officer and confirmed by learned CIT(A) on the basis of generalized observation that there was possibility of leakage in the form of expenditure of personal nature. In the aforesaid facts and circumstances, we are of the view that the disallowance of a total amount of Rs.3,75,036/- is excessive and unreasonably high. In our view, a disallowance of Rs.10,000/- would be just and fair in the facts and circumstances of this specific case. Accordingly, out of total disallowance of Rs.3,75,036/-; an amount of Rs.10,000/- is sustained; and the Assessing Officer is directed to delete the remaining disallowance of Rs.3,65,036/-.
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