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2017 (11) TMI 1545 - AT - Income TaxDisallowance u/s 14A - non identification of expenses - Held that:- In the present case AO has not even identified any specific item of expense he merely says that explanation of assessee is not correct as huge investment is made. As per above discussion respectfully following above authorities which are binding on us it is held that there is no satisfaction of terms of s. 14A read with Rule 8 D. Copy of order for AY 08-09 is also placed as per which no disallowance u/s 14A was made, hence assessee is right in submitting that disallowance is also against the principle of consistency in the absence of any facts. - Decided in favour of assessee Ad-hoc disallowance of business promotion expenses - non rejection of books of accounts - Held that:- It is on record that assessee has made all the compliance from time to time. Purchases are fully vouched and accounts are not rejected. It is also a fact that no single item of expense is identified by AO which he could have stated as not incurred for business purposes. It is also borne out from order that such expenses are accepted in past when even % of expenses on sale was more in Ay 06-07. Sales have increased substantially. AR has relied on cases Ganpati Enterprises Ltd. (2013 (12) TMI 1097 - ITAT DELHI) and NATIONAL INDUSTRIAL CORP. LTD. Vs CIT [2002 (8) TMI 93 - DELHI High Court] in support of proposition that without rejection of accounts and without finding any basis/defect in specific expense, ad-hoc disallowance cannot be made. Accordingly, the addition of ₹ 2,00,000/- is hereby deleted. Replacement of compressor of Colling unit - Nature of expenses - revenue or capital expenditure - Held that:- Compressor is admittedly a part of unit which is replaced and it longer life or it is procured independently is wholly irrelevant. Issue is covered by various decisions in favor of assessee and expenditure is revenue in nature.
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