Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (9) TMI 698 - AT - Income TaxDisallowance of entertainment expenses and discount allowed by the assessee - Expenditure for personal use of director - HELD THAT:- We are of the view that at the most some proportion of these expenses can be attributed to the personal use of the director. Keeping in view of this fact we deem it fit to make an ad hoc disallowance of 5% of these expenses towards personal expenditure. Consequently we modify the order of CIT(A) and direct the AO to delete the addition to the extent and thus addition is sustained. Further in respect of discount, we note that the assessee is in the business of selling mobile recharge in which the discounts are allowed to the customer in the ordinary course of business which has been accounted for by the assessee in the books of account which were produced before us. We note that the number of entries of discount allowed ran into 7,327/-. We note that discounts were allowed during the mobile recharge for which there was no separate voucher available in the business of assessee. The authorities below have failed to justify and reason disallowance of 40% of the total expenditure and the conclusions of both the authorities are based upon the surmises and conjectures which is not permissible under the Act. Accordingly we set aside the order of CIT(A) on this issue and direct the AO to delete the addition. Appeal of the assessee is partly allowed.
|