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2017 (1) TMI 621 - AT - Income TaxDisallowance of expenses pertaining to guest house maintenance and repair maintenance - it relates to cash payment which the assessee did not provide vouchers/bills - Held that:- It is evident that the disallowance made is completely ad-hoc without specific finding as to how the expenditure incurred is not for business purpose. It is not the case of the AO that the expenditure claimed is not genuine. Since all bills/vouchers and ledger accounts were before the AO, it would have been appropriate that specific vouchers etc. were identified before the disallowance was made. The assessee had incurred the expenditure on a lease property used as holiday home for the employees of the company. The expenses incurred in cash or through DD are towards electricity, water, house tax charges etc. and are for business purposes. Similar is the nature of expenses claimed under repairs and maintenance. Therefore CIT(A) has rightly held that there is no justification for making an ad-hoc disallowance when all bills/vouchers etc. were produced before the AO - Decided in favour of assessee Addition on account of repair and maintenance - Held that:- CIT(A) has perused the bills/vouchers produced before the AO and noted that expenditure incurred is purely on repair and maintenance of the roof and outer areas and cannot be treated as capital expenditure providing benefit of enduring nature or leading to creation of capital asset. Therefore, Ld. CIT(A) has rightly held that the disallowance of the impugned expenditure by treating the same as capital in nature was not in order and was therefore rightly deleted which does not need any interference on our part Addition on account of repair and maintenance - Held that:- CIT(A) has observed that the expenditure has been incurred on painting, polishing, repair of false ceiling, water proofing treatment, tile work, dismantling of roof and other miscellaneous repairs. On careful examination of the bills/vouchers, it was noted that sum is incurred for dismantling and grading of roof. It appears that entire roof has been recast. Further note that Ld. CIT(A) has treated a sum as revenue in nature and therefore the disallowance made by the AO was rightly directed to be deleted which does not need any interference on our part.
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