Recovery or repayment of fraudulent income doesn’t qualify as allowable expense

Mukesh Rasiklal Shah Vs ACIT (ITAT Ahmedabad)

ITAT Ahmedabad held that recovery or repayment of fraudulent income does not qualify as an allowable expense since recovery of such income does not constitute an expense incurred wholly and exclusively for the purpose of earning income under Section 57 of the Act. Thus, denial of deductions for subsequent recovery upheld.

Facts- The assessee is a Chartered Accountant by Profession. A search and seizure operation carried out at the residential and office premises of the assessee and several incriminating documents

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