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2014 (4) TMI 69 - AT - Income TaxUndisclosed professional receipts – Difference between the Annual Information Return and professional receipts - Held that:- CIT(A) failed to exercise his appellate jurisdiction u/s 250 of the Act - The duty was also cast upon the CIT(A) to admit and consider the evidence produced before him by the assessee - There is no doubt about the legal position that if any document furnished by the assessee before the Commissioner (Appeals) is in the nature of clinching evidence, which goes to the root of the case then in the interest of justice such types of evidence should not be rejected - The documents relied upon by the assessee were very much relevant and necessary for the just and proper decision of the case - All the receipts as per AIR information except the receipt of Rs.4,975/- were reconciled by the assessee before the CIT(A) - The assessee has also given a reasonable explanation of regarding the non-reconciliation of the remaining meager amount – thus, the action of the CIT(A) in rejecting the confirmations/reconcilement of the amount was not justified – Decided in favour of Assessee. Disallowance on account of premium paid for professional indemnity insurance - Personal insurance of the partners – Held that:- The firm is providing professional services and as such the professional indemnity insurance premium thus was related to the professional activity of the partners of the firm and was for indemnification of any loss arising out of any claim of damages or compensation payable by the assessee firm or its partners in relation to the professional services provided by them to their clients – the observation that the expenditure was in relation to personal expenditure is wrong – Decided in favour of Assessee. Restriction in disallowance of expenses - expenditure incurred on travelling, motor-car and telephone – Held that:- The assessee has not given any specific explanation as to why there should not be any disallowance in respect of expenditure - CIT(A) has rightly observed that the personal element in use of motor car and telephone expenses and travelling expenses cannot be ruled out – CIT(A) reduced the disallowance to 1/10th of the total expenses – there was no infirmity in the order of the CIT(A) – Decided against Assessee.
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