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2016 (1) TMI 542 - HC - Income TaxDisallowance tax deductible expenses - Held that:- Disallowance of the expenses to the extent of ₹ 3.44 lakhs by the AO cannot be sustained in law particularly when audited accounts, containing two separate P&L accounts for the two distinct lines of activity, were not rejected. The disallowance could not have been made on the basis of surmises and conjectures. There was no material before the AO to come to the conclusion that the expenses were either excessive or unreasonable. The impugned order of the ITAT on this issue is unsustainable in law. In that view of the matter, the Court sets aside the assessment order of the AO as well as the impugned order of the ITAT on the above aspect. The order of the CIT (A) is restored. The question framed is answered in the affirmative i.e. in favour of the Assessee and against the Revenue.
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