Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 180 - ITAT MUMBAIAllowable business expense u/s 37 - gift amount as paid out of commercial expediency to strengthen the relationship with employees - Held that:- In the instant case the assessee has claimed gift expenses of ₹ 35,000/- by debiting it to its P&L account. This is purely personal expense of the assessee. If the assessee chooses to make such gifts out of the income received by the assessee in the course of his business, he can do so, but cannot claim it as a legitimate expenditure while computing the income for the purpose of taxation as held in CIT v. Jeevandas Laljee & Sons (1998 (11) TMI 32 - MADRAS HIGH COURT). Ground of appeal are dismissed. Expenses incurred for business purposes - expenses quite nominal compared to the turnover of the assessee and hence the disallowance is excessive - Held that:- The assessee could file before the Ld. CIT(A) the ledger account of expenses to suggest that all the expenses are for regular business purposes. Before us, the Ld. counsel could not find fault with the findings of the CIT(A). However, we find that the disallowance made by the AO and confirmed by the Ld. CIT(A) at 15% of expenses of ₹ 18,31,221/- is on a higher side.Considering the facts and circumstances of the case, we direct the AO to restrict the disallowance to 10% of the aforesaid expenses of ₹ 18,31,221/- in place of 15% made by him.
|