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2018 (1) TMI 733 - ITAT DELHIExpenditure laid out or expended wholly and exclusively for the purpose of the business or profession of the assessee u/s 37 - one-time settlement charges paid to banks - benefit for becoming a guarantor - Held that:- The assessee was carrying on profession of advocate. The assessee had given the guarantee for obtaining loan by the Company M/s India Magnetics Ltd. There is no direct/indirect nexus between the assessee’s profession and the company for which he gave his guarantee. The assessee is also unable to prove that the assessee has received any direct indirect benefit for becoming a guarantor for the above company. CIT(A) has, therefore, done good reasoned order on this account, which needs no interference. The assessee could not controvert the test laid down for claiming deduction u/s. 37(1), as discussed by the ld. CIT(A). The assessee also failed to prove that they had got any benefit for becoming a guarantor of the said company. Therefore, one-time settlement charges paid to banks is not an allowable expenditure under section 37 of the Income Tax Act - Decided against assessee. Disallowance out of expenditures claimed - Held that:- We find that the ld. Authorities below have made the disallowance on adhoc basis, that too without rejecting the books of account of the assessee. Moreover, the ld. Authorities below have failed to pin point any particular expenditure which was of disallowable nature. Therefore, adhoc disallowance made by the authorities below deserves to be deleted - Decided against revenue
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