Revision U/s. 264 can be done for Firm’s expenses claimed in individual return after Assessee files revised computation for both

Hitech Analytical Services Vs. Pr. CIT (Gujarat High Court)

Assessee claimed Audit fees Rs. 28,090, Bank Charges Rs. 3,091, Car Loan interest Rs. 1,04,814, Depreciation Rs. 6,12,567, Petrol expenses Rs. 1,03,396, Traveling expenses Rs. 2,18,150 Totalling to Rs. 10,70,108 in her individual return.

AO disallowed the expenses on the ground that assessee’s share of the profit of the firm was exempt from payment of tax and thus, the expenditure claimed was for the purpose of earning exempt income and therefore, not allowable under section 14A. The assessment of firm was pending.

Assessee submitted revised computation of firm and her individual return and claimed all the expenses in firm. However, AO ignored that computation and made assessment without taking into account those expenses. Assessee filed revision petition before CIT. CIT disposed of revision petitions in case of the partner, it confirmed the view of AO that the expenditure was in relation to earning exempt income and therefore, not allowable deduction.

Please become a Premium member. If you are already a Premium member, login here to access the full content.