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2012 (10) TMI 300 - AT - Income TaxDisallowed of expense - Lack of proper documentary evidence – AO disallow contract fees – Held that:- There is no dispute that such expenditure is required to be incurred for the purpose of assessee’s business but the disallowance was made mainly for the lack of supporting evidence to support the claim of the assessee. The factum of deduction of TDS by the assessee from the said payment is sufficient to fill this gap and relying on the same. Issue decides in favour of assessee Ad-hoc disallowance of non-verified expense – Assessee has paid cash expense on self-made vouchers in relation to port expense – AO made disallowance to the extent of 50% of the total expenses due to unverifiable element involved - Held that:- As such expenses are required to be incurred at ports keeping in view the very nature of its business. The disallowance so sustained by the CIT(A) is on the higher side keeping in view the nature of the expenses incurred by the assessee which are essentially required to be paid in cash by way of self-made voucher. We, therefore, find it fair and reasonable to restrict the disallowance made on this issue to 25% of the total expenses. Issue partly allowed Ad-hoc disallowance bulk survey material expenses - Absence of proper documentary evidence – Held that:- As concluding from facts and ledger book, bulk survey expenses shows that most of the payments appearing therein were made by cheques and even TDS was also deducted from the said payments. Assessee firm had earned income of about Rs.22 lakhs from the survey activity, there was no reason for the authorities below to make any disallowance out of bulk survey expenses. Issue decides in favour of assessee Disallowance of professional expense – Held that:- As the onus is on the assessee to establish that expenses incurred on professional fees paid were wholly and exclusively for the purpose of its business and this onus cannot be said to be discharged merely by showing that such professional fees was paid by cheque and TDS was also deducted from such payment. Upheld the disallowance and issue decides in favour of revenue Disallowance of telephone & conveyance expense – Nature of expense official or personal – FBT has been paid on said expense - Held that:- Once FBT is levied on such expenses, it follows that the same are treated as fringe benefits provided by the assessee as employer to its employees and the same have to be appropriately allowed as expenses incurred wholly and exclusively incurred by the assessee for the purpose of its business. Issue decides in favour of assessee
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