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2021 (8) TMI 647 - AT - Income TaxDisallowance of expenses made u/s.37(1) - disallowance of expenditure on adhoc basis made by the ld. AO by giving a categorical finding that the ld. AO had not even whispered in the assessment order as to how a particular expenditure of the assessee is excessive and not incurred for the purpose of business u/s.37(1) - HELD THAT:- CIT(A) also observed that it is not the case of the ld. AO that the expenditure debited by the assessee are personal in nature. CIT(A) thereafter, relied on the decision in the case of J.J. Enterprises vs. CIT [2001 (9) TMI 6 - SUPREME COURT] and proceeded to delete the adhoc disallowance made by the ld. AO. Before us none of the categorical findings recorded by the ld. CIT(A) had been controverted by the Revenue. It is not in dispute that assessee had indeed earned business income in the form of service charges and same has been assessed as business income by the ld. AO. This itself goes to prove that assessee had indeed carried on business during the year. Once, it is accepted that assessee had carried on business during the year, and when the expenditure debited in the P & L account are not doubted either on its genuineness or on its incurrence for the purpose of business of the assessee by the ld. AO, the expenditure thereon, claimed as deduction by the assessee would become allowable expenditure. It is not the case of the ld. AO that the expenditure claimed by the assessee are personal in nature or expenditure incurred were in the capital field. We further hold that the incurrence of business expenditure whether it is commensurate with the business receipts earned thereof is of absolutely no relevance to decide the allowability of business expenditure. Hence, we do not find any infirmity in the order of the ld. CIT(A), granting relief to the assessee. Accordingly, the grounds raised by the Revenue are dismissed.
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