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2016 (4) TMI 633 - AT - Income TaxDisallowance on account of entertainment expenses and traveling expenses - CTI(A) restricted the disallowance - Held that:- In the present case, it is noticed that the assessee had been associated with two firms i.e. M/s AZB & Partners and M/s Ajay Bahl & Co. to render consultancy services and advice on the matters relating to his field of expertise. The AO asked the aforesaid firms u/s 133(6) of the Act about the involvement of the assessee and in response the above said two firms did not deny the facts that the services were rendered by the assessee. In the present case, the incurring of expenses was not doubted. However, the AO was of the view that those expenses could have been recovered from the clients and accordingly made the disallowance of the entire expenses incurred under the head ‘entertainment’ and ‘travelling’. In the present case, it appears that the AO did not appreciate this fact that the assessee had incurred approximate 3% of the personal fee for entertainment expenses and incurred about 17% of the professional fee on account of travelling expenses which cannot be considered to be unreasonable. At the same time, the assessee had not produced the vouchers for all the expenses incurred, moreover, in such type of cases, involvement of personal element cannot be ruled out. In our opinion, the ld. CIT(A) was justified in restricting the disallowance to the extent of 20% instead of whole amount disallowed by the AO. We do not see any infirmity in the impugned order of the ld. CIT(A) and accordingly do not see any merit in this appeal of the department. - Decided against revenue
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