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2021 (5) TMI 507 - AT - Income TaxDisallowing expenses exclusively for business purpose - disallowance of interest - assessee has paid interest on OD limit from Bank of Baroda - HELD THAT:- The assessee has utilized OD limit jointly held with Shri Satbir Singh for the purchase of business assets. There are two entities namely Regent Grand and Regent Continental, the EMI has been paid from Regent Continental which was wrongly debited to Satbir Singh capital account upto 31.03. 2012. The interest paid by the assessee has to be given benefit of deduction unless found contra. We in principle hold that the assessee is eligible to file revised computation which has to be given due consideration by the revenue authorities. The matter is referred to the file of the Assessing Officer for verification of the facts to examine the claim of the assessee with regard to the loan availed, interest paid and if the interest has been debited to capital account of Shri Satbir Singh or not by going through the bank statements. Disallowance of 20% of the expenses - disallowance was made by the revenue authorities on the basis that the appellant was unable to file complete bills/vouchers and other details, such as log books, and other documentary evidence to support the expenses - also been pointed out by the AO that some expenses have been incurred in cash and there are hand written and self- made vouchers - CIT (A) held that there is always possibility to inflate the expenditure on the basis of self- made vouchers which we are unable to accept - HELD THAT:-As gone through the assessment order and the reason given by the Assessing Officer that the expenses are neither fully vouched nor fully verifiable. The AO did not bring on record as to what enquiries he wanted to conduct for verification of the vouchers. No disallowance is warranted owing to non-verification of the vouchers produced by the assessee. With regard to the expenses for which no vouchers have been produced, the assessee is hereby given another opportunity to produce all the bills and vouchers before the revenue authorities. Appeal of the assessee allowed for statistical purposes.
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