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2016 (11) TMI 360 - AT - Income TaxReopening of assessment - addition u/s 14A - Held that:- From the original assessment order it appears that the assessee had filed all necessary details and material for the purpose of arriving at disallowance u/s 14A of the Act. There is no evidence from the records placed before us that the assessee has failed or omitted to disclose the material / primary facts. These were every much available on record and the Assessing Officer had failed to draw correct legal inference at the time of original assessment from the said primary facts. This cannot be held as error or omission on the part of the assessee and as per the proviso (1) to Section 147 of the Act and reopening of assessment for the year under consideration cannot be sustained. Addition u/s 14A - Held that:- It is not possible that no expenditure were incurred towards earning the exempt income and in view of the A.O., on the basis of order of this Tribunal in assessee’s own case, for the Assessment Year 2008-09 2015 (2) TMI 481 - ITAT DELHI and 2009-10 2015 (3) TMI 58 - ITAT DELHI placed at pages 33-44 of the paper book, we direct Ld. A.O. to calculate the disallowance on the basis of 0.5% of expenditdure. Disallowance made under the head of 'foreign travelling expense' - Held that:- CIT(A) correctly held that out of total foreign travel expenses, assessee had explained an amount of ₹ 8,50,401/- and gave relief to this extent. In respect of balance amount of Rs,3,74,674/-, Ld. CIT(A) held, it to be having source of personal element and restricted the disallowance to 50% of such amount being Rs,1,87,337/-. Disallowance made u/s 40A(2)(b) - Held that:- A.O. and Ld. CIT(A) have admitted to the position that the salary paid to Smt. Pushpa Rathi is almost equal to the salary paid to the other staff members. Thus, L. A.O. has failed to establish the main ingredient to initiate Section 40A, which is, expenditure being excessive or unreasonable. We, therefore, are not agreeable to the ad-hoc disallowance sustained by Ld. CIT(A) when consistently in the preceding years, no such disallowance has been made by the Ld. A.O. We, accordingly delete the disallowance restricted by Ld. CIT(A) on this count.
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