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2021 (1) TMI 1032 - AT - Income TaxNature of expenditure - expenditure as license fee payment to M/s. Remfry and Sagar Consultants Pvt. Ltd. (RSCPL) for use of goodwill of ‘Remfry & Sagar’ and to practice in this name - revenue or capital expenditure - HELD THAT:- We are of the considered view that amount of deduction claimed by the assessee on the amount of licence fee paid to RSCPL is allowable as expenditure u/s 37 of the Income-tax Act, 1961. So, ground no.1 is determined against the Revenue. Travelling expenses and entertainment expenses - ad hoc disallowance of 5% - HELD THAT:- We are of the considered view that none of the expenditure can be disallowed merely on the basis of surmises. Perusal of the impugned order passed by the ld. CIT (A) shows that he has followed the earlier year’s order passed by the ld. CIT (A) allowing the identical expenditure. When undisputedly entries in the books of account qua the claimed expenditure have not been questioned in any manner whatsoever ad hoc disallowance made by the AO to the extent of 5% of the expenditure of travelling expenses and entertainment expenses is not sustainable in the eyes of law. So, we find no scope to interfere into the findings returned by the ld. CIT (A), hence ground no.2 is determined against the Revenue.
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