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2022 (6) TMI 1100 - AT - Income TaxEntertainment tax subsidy - capital or revenue receipt - disallowance u/s. 37 - HELD THAT:- In the assessment order the AO has observed that since the entertainment subsidy has been claimed as capital receipt by the assessee, the assessee must have incurred certain administrative & Operational expenditure for the said capital receipt. Therefore, AO made ad hoc disallowance u/s. 37 @ 10% of expenditure. However, the said disallowance was not added by AO in the assessment order because the AO has added entire entertainment subsidy as capital receipt. This is an ad hoc disallowance. AO has not pointed out any specific expenditure which was in the nature of revenue expenditure. AO cannot presume it. Therefore, the AO is directed to delete the said disallowance. Accordingly, the assessee's Ground No. 1, 2 and 3 are allowed. Disallowance of 10% of expenditure out of Travelling, Conveyance, repairs and maintenance - Addition on the ground that these expenditures were in cash, no evidence filed to prove it - HELD THAT:- It is important to understand here that the ld. CIT(A) has given a finding that many of these expenditures were not supported by bills. Before us also the Assessee has not claimed that all the expenditures were supported by bills. The onus is on the assessee to prove the genuineness of the expenditure and to prove that the expenditure were incurred wholly and exclusively for the purpose of business of the assessee, In this case the assessee has not filed any documents to prove that the expenditure were wholly and exclusively for the business and has also not filed bills. Therefore, we uphold the disallowance made by the AO.
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