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2021 (1) TMI 88 - AT - Income TaxDisallowance of various expenditure debited into profit and loss account including depreciation on asset, interest on vehicle loan, miscellaneous expenses, repairs & maintenance- others - non business expenses - HELD THAT:- In order to allow deduction for expenditure the onus is on the assessee to prove that expenditure debited into profit and loss account is having nexus with income earned for the year. In this case, on perusal of disallowances made by Assessing Officer for various expenditure including salary, depreciation on car and air-conditioner , repairs and maintenanceothers and miscellaneous expenses, we find that none of the expenditure is having direct nexus with income earned for the year under consideration being interest income , rental income and dividend income. Unless, assessee proves nexus between expenditure debited into profit and loss account and income earned for the year, the question of allowance of expenditure does not arise. Moreover, assessee fails to file any evidence to prove that it was in the business activity but due to temporary lull in the business, business operations was not carried on for impugned assessment year . AO as well as learned CIT(A) have brought out clear facts that assessee has leased out factory premises to outside party and derived rental income as there is no manufacturing activity in the assessment year under consideration. Assessee has failed to file any evidence to prove that depreciation claimed on air-conditioner and motor car is having nexus with income earned for the year . Likewise, assessee has failed to file any evidence to prove that there is nexus between miscellaneous expenditure, interest on vehicle loan and repairs & maintenance-others to income being rental income, interest income and dividend income earned for the year. As regards salary, learned CIT(A) considering the fact that assessee need to pay salary expenditure to employees, even though there is no business operations for the year has allowed 50% salary debited into profit and loss account . The assessee has failed to file any evidences to counter finding of fact recorded by the learned CIT(A) . We are, therefore, of the considered view that there is no error in the findings recorded by learned CIT(A) to confirm additions made by the Assessing Officer towards various expenditure debited into profit and loss account. Appeal filed by assessee is dismissed.
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