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2012 (11) TMI 103 - AT - Income TaxDisallowance of Car and Telephone Expenses in part – Held that:- Considering the nature of assessee’s business as well as facts and circumstances of the case, disallowance of 1/10th of the car expenses and 1/10th of the telephone expense will meet the ends of justice - Assessing Officer is directed to recompute the income of the assessee accordingly. Ground of the appeal are allowed partly. Disallowance of local conveyance, entertainment , staff welfare and packing material expenses – Following the decision of court in case of [Jivat lal Purtapshi v CIT 1967 (2) TMI 8 - BOMBAY HIGH COURT ] Held that:- Assessing Officer stating that having agreed to the disallowance of Rs. 9,402/- being 1/5th of these expenses before the Assessing Officer, the AR can not take a u-turn without contesting the veracity of the statement of the Assessing Officer – appeal of assessee dismissed. Addition on account of excess of interest more than 12% - Held that:- Interest paid by the assessee to her nephews is not excessive and unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made on the legitimate needs of the business and, hence, no disallowance u/s 40A(2)(b) of the Act.
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