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2019 (6) TMI 914 - AT - Income TaxAddition on unreasonable of expenses - expenditure incurred under the head, ‘Deepavali expenses’, donation, general charges, marketing management specialisation expenses, travelling expenses, business promotion and other expenses - CIT-A deleted addition - HELD THAT:- Substantial increase in certain expenditure incurred under the head ‘Deepawali expenses, donation, general expenses and other expenses. It is also an admitted fact that the turnover of the assessee has been increased from 184 crores to ₹ 387 crores. The AO has disallowed expenditure incurred under various heads without recording any observation as to incorrectness in books of account maintained by the assessee for the relevant financial year or supporting evidence filed in justifying expenditure incurred under those heads. AO has compared increase in expenditure to previous financial year without taking note of corresponding increase in business turnover of the assessee. On the other hand, the assessee has filed necessary details of expenditure and also explained reasons for increase in expenditure. The Ld.CIT(A), after considering relevant facts and also taking note of the fact that there is no observations by the AO in regard to the incorrectness of books of account scaled down disallowance to 10% for such expenses. We do not find any reason to interfere with the findings recorded by the CIT(A) while deleting addition made by the AO towards disallowance of expenditure. - Decided in favour of assessee.
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