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2014 (1) TMI 897 - ITAT MUMBAIDisallowance of M&D expenses - Genuineness of the claim of consumption of the medicine and disposables for the patients and the recording of the same – Held that:- The paper books contains sample copies of the patients' records - there is some noting relating to prescription of the medicines by the doctors - they do not indicate that the prescribed medicines are supplied by the assessee – the details furnished are not exhaustive for all the medicines consumed - the assessee is not maintaining the records relating to "consumption of medicine" - AO has not demonstrated the need for maintaining any records in this regard - it is trite law that the assessee is under obligation to demonstrate the claim of expenditure made in the return/financial statements – thus, the AO is justified in resorting to make disallowance on account of "consumption of medicine and disposables. The basis adopted by both the authorities rejected, ie flat rate of 20% or 5% of the claim - some amount of guesswork is accepted in such estimation based additions and however, complete guesswork is unacceptable - considering the failures of the assessee in discharge of the onus and to establish that said medicine and disposables are consumed for the patients, making round sum disallowance out of the claim in the return, must meet the needs of the justice - Such a measure may motivate the assessee in directing his accounting staff to maintain proper records or evidences on this account of 'consumption of medicine and disposables' too - The disallowance is restricted to round sum amount of Rs. 1 lakh - Thus, the AO is directed to restrict the disallowance – Decided Partly in favour of Assessee.
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