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2022 (2) TMI 111 - AT - Income TaxDisallowance of speed money u/s 37(1) - expenses under the head office administration expenditure - AO stated that on perusal of the detail, it was noticed that miscellaneous expenses included entertainment expenses speed money etc - HELD THAT:- The assessee explained that these expenses were incurred on behalf of the respective principals and have been debited to respective vessel account. The expenses was ultimately reimbursed by the principal and therefore these expenses were actually incurred on behalf of the principals and ultimately taken by the respective principal amount. The assessee has also explained the exact process of accounting and documentation of such expenses which is also produced in the submission of the assessee It is noticed that ld. CIT(A) after following the decision of M/s M. Jamunadas & Company [2017 (1) TMI 1445 - ITAT MUMBAI] has sustained the disallowance of 25% to such expenses made by the assessing officer. In this regard the contention of the assessee that in accordance with the above referred decision of the ITAT it has already made suo moto disallowance which was not considered by the lower authorities before making further disallowance - we observe that the contention of the assessee that it has already made suo motto disallowance which pertained to the expenses of the nature of speed money and the claim that the A.O had mistakenly presumed the entire administration expenditure for computing further such disallowance @ 25% as speed money is required verification on the basis of relevant supporting detail and document. Therefore, we consider it will be appropriate to restore this issue to the file of the assessing officer for deciding de novo after verification and examination of the relevant material and submission of the assessee. Therefore, this ground of appeal of the assessee is allowed for statistical purpose. Disallowance u/s 14A r.w.r. 8D - CIT(A) has restricted the disallowance computed by the assessing officer u/s 14A r.w.rule 8D to the extent of the exempt income of ₹ 10 lac earned by the assessee - HELD THAT:- During the course of the appellate proceedings before us the ld. Counsel has referred the provision of Sec. 115BBDA and contended that provision of this section was not considered while computing disallowance in the case of the assessee. Therefore, we are of the considered view that it would be appropriate to restore this issue to the file of the assessing officer for deciding afresh after taking into consideration the applicability of provision of Sec. 115BBDA and after verification of the relevant material and submission of the assessee. Accordingly, the additional ground of appeal of the assessee is allowed for statistical purposes.
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