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2020 (12) TMI 552 - AT - Income TaxDisallowance @ 50% of expenses - Adhoc disallowance of telephone, foreign tour expenses, vehicle related expenses (fuel, maintenance and depreciation), Diwali expenses, office maintenance expenses, staff welfare expenses etc - HELD THAT:- AO has categorically mentioned the fact of examination of books of accounts maintained by the assessee in the impugned assessment order and no adverse observations have been made in respect of the books of accounts. We notice that no specific instance of non-maintenance of the voucher or personal use has been pointed out by the lower authorities for sustainnence of the disallowance out of profit and loss account. It is well settled law that no disallowance of such expenses can be made on adhoc basis without pointing out any specific defect or instance of non-maintenance of vouchers. The disallowance also cannot be made merely on the ground that payment have been made in cash unless the parties to him payment is made are not genuine. No doubt regarding geninuenity of the parties has been raised by the lower authorities. Similarly in respect of foreign tour expenses, the Assessing Officer observed that expenses have been incurred on travel of the assessee and his wife to Malaysia and thus not related to business activity of the assessee. On the contrary, the assessee submitted that his proprietary concern is a prominent dealer of M/s Zenith Computers Ltd., who organises annual meet every year at different places. During those annual meets technical presentation are given to dealers, their common problems are discussed, annual rewards to dealers are distributed and business policies for the ensuing year are also discussed. For attending the dealer meet, the assessee was required to make his own travel arrangement and rest of the expenses like lodging, boarding, local transport etc. were sponsored by M/s Zenith computers Ltd. The ld. AR argued that had this been a pleasure trip, the assessee would have taken his children also along with him, but in view of the business trip, he along with his wife who is business manager, only attended the meet. In view of the submissions, the Ld. CIT(A) has already allowed 50% of the expenses. Sustainance of the balance 50% expenses on ad hoc basis is not justified, when the assessee has explained business purpose of the expenses. We are of the opinion that action of the Ld. CIT(A) in sustaining 50% of the disallowances made by the Assessing Officer that too on adhoc basis is not justified. - Decided against revenue. Unexplained investment in furniture and fixture u/s 69 - HELD THAT:- CIT(A) has though agreed with the possibility of amount being sale proceeds of the old furniture of father and representative sale of the personal asset therefore, it was not taxable, however, he has observed that assessee has not shown any cost incurred on the same and therefore, addition was sustained. In our opinion, the onus was on the assessee to explain that ₹ 99,000/- received was against sale of old furniture and electronic appliances. The assessee has neither produced any agreement with buyer for sale of furniture and electronics appliances nor produced any confirmation from buyer of the house that he has paid ₹ 99,000/- against purchase of furniture installed in said house. The claim of the assessee that he received those items of furniture & electronics appliances from his father cannot be accepted without any documentary evidences in support. In absence of any documentary evidence the claim of the assessee is rejected and the addition made by the Assessing Officer is upheld - Decided against assessee.
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