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2018 (2) TMI 2105 - AT - Income TaxDisallowances under the head ‘Selling & Administrative’ expenses - AO has disallowed these expenses on the grounds that these expenses have not been properly vouched - CIT (A) has remitted the disallowance from 20% to 10% on the grounds that the disproportionate increase has not been justified by the assessee - AR argued that AO has not doubted in genuineness of expenses and not pointed out even single instance where expenses were not supported by bills and vouchers - HELD THAT:- Since the matter of availability of the bills is being disputed by both the parties, we hereby remand the matter to file of the Assessing Officer to verify the bills and allow the expenses debited. AR is also directed to produce all the bills and vouchers before the Assessing Officer to credit the claim of expenditure. Rebates and Discount Expenses - AO disallowed 10% of the expenses claimedas the Rebates and Discounts claimed do not commensurate with the increase of the turnover of the assessee and the assessee could not satisfactorily explain the drastic increase in the expenditure - AR argued that in applying the test of commercial expediency for determining whether the expenditure was wholly and exclusively laid out for the purpose of business, reasonableness of the expenditure has to be judged from the point of view of the businessman and not of the Revenue - HELD THAT:- There were no findings by the Assessing Officer as to the discrepancy in books of accounts or any other material showing that these expenses debited or not genuine or not verifiable. From the submissions it could be found that the increase in the rebates was due to restructuring of the business of the assessee and the department cannot determine as to what should be the percentage of rebates and discount to be allowed in the absence of any material, investigation, evidence or proof about the non admissibility of the expenses hence the ad-hoc disallowance of 10% made by the Assessing Officer is hereby directed to be deleted.
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