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2022 (9) TMI 348 - AT - Income TaxAdhoc disallowances @ 10% out of expenses claimed on account of Freight, after sales service, Repairs & Renovation, printing & stationary, Running & maintenance - CIT(A) sustaining a part of the addition made by Ld. ITO on the ground of non-availability of vouchers etc. in support of expenses claimed in books of account - HELD THAT:- As disallowances of expense by the AO without any specific finding with support of corroborative evidence to prove the contrary and merely mentioning that supporting bills/vouchers were missing or not produced would not be sufficient for the purpose of such addition to reject the claim of the appellant’s business expenses. CIT(A) without verifying the facts of the case, and considering the written submission of the assessee confirmed the addition on the basis of the observation of the AO. Such observation of the ld. CIT(A) is fallacious, since, expenses were claimed by the appellant assessee for the furtherance and running of its regular business. CIT(A) has not discussed any worthwhile argument as to why, he has treated the expenses claimed by the assessee as bogus. It has been held in plethora of the judgments that any expenses that goes towards proper understanding/or management of owns business is an expense allow u/s 37 - The mandate does not permit the AO to step into the shoes of the business man and dictate him, how he has to manage the business. The authorities below did not point out any specific lacunae as regards to disallowance of expenses. It is noted that assessee is maintaining regular books of account which are subject to tax audit u/s 44AB of the Act. and that the authorities below had not pointed out any defect in the accounts as per the audited books of account of the assessee. DR did not file any contrary view before us. In the case of CIT v. M/s S.S.P. Pvt. Ltd. [2011 (7) TMI 574 - PUNJAB AND HARYANA HIGH COURT] the Hon’ble Punjab & Haryana High Court has observed that where audited books of account along with vouchers were produced by the assessee and thereafter the Assessing Officer has failed to show that the said expenditure was not for the business purposes, then such disallowance made on ad-hoc basis without there being any material would not be justified. Appeal of assessee allowed.
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