1. Rules of consistency must be followed unless and until contrary facts are brought on the record. Income from letting out a portion of the property would continue to be taxed under the head ‘Income from House Property’ as was assessed in earlier year also, if the intention of the assessee is to earn rental income.
2. If the A.O. is not satisfied with the maintenance of the accounts with respect to the expense claimed by the assessee, he should have pointed out a specific defect or asked the assessee to furnish complete details with respect to any particular expenditure. Disallowance by Assessing officer on estimate basis is not justified without pointing out any defect in any of the vouchers/bills placed by the assessee before the A.O. relating to any particular expenditure.
3. Payment made to Trade tax department under ‘Scheme of settling of disputed tax’ is allowable in the year in which liability get settled though the claim is related to earlier years.
4. Disallowance of the expenditure incurred on foreign travel by director is not justified merely on that ground that it was undertaken along with his daughter who has travelled on study purpose without going into the fact that daughter of director is also working in the company as Deputy General Manager. Beside the tour taken was a business trip which was duly authorised by the resolution of Board of Directors of the company and all the relevant documents in terms of copies of visa, e-mail copies of correspondence, copy of passport and hotel bills submitted by the assessee supports genuineness of the claim amount.
5. Sponsorship charges incurred by the assessee company on study of daughter of the Director of the company abroad was not held to be of Personal Nature in view of the fact that study was sponsored by the assessee-company for its business exigency. Moreover she, being a Deputy General Manager of the assessee company, has entered into an agreement with the assessee company to serve the company for at-least five years post completion of studies abroad. The assessee company is expected to derive benefits from her post study.
As a result, appeal of the revenue is dismissed. Case Decided in favor of the assessee.