Spectrum Talent Management Vs ACIT (ITAT Delhi)
ITAT Delhi Deletes Ad-Hoc Travel & Telephone Disallowances; 36(1)(va) Issue Sent Back for Verification
In this appeal, Assessee challenged ad-hoc disallowances of travelling & telephone expenses, along with disallowance u/s 36(1)(va). AO had disallowed 10% of travelling expenses of ₹19,34,201 & 10% of telephone expenses of ₹26,52,025, merely stating that complete bills & vouchers were not produced.
CIT(A) reduced but largely sustained these disallowances.
Tribunal noted that books of account were duly audited u/s 44AB, no defects were pointed out, no specific bill or entry was identified as unverifiable, & both AO and CIT(A) made pure ad-hoc disallowances without any enquiry or evidence. Relying on Vanesa Cosmetics & Mokshstar International,Tribunal held that ad-hoc disallowances without disturbing books are unjustified. Both disallowances were deleted.
On the issue of disallowance of employees’ contribution u/s 36(1)(va), Tribunal observed that CIT(A) relied solely on Checkmate Services (P) Ltd without verifying the factual due dates including grace period as reported in the tax audit report. Since the issue required factual verification of actual dates of deposit, Tribunal restored this matter to AO for fresh examination after giving opportunity to Assessee. The appeal was partly allowed—ad-hoc disallowances were deleted & the s.36(1)(va) issue was remanded.
