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2023 (1) TMI 769 - AT - Income TaxAddition of “local conveyance and “conveyance transport” - non-business use of the above expenses - HELD THAT:- It is observed that the AO had made the disallowance out of Travelling Expenses on ad-hoc basis stating that pre-ponderance of probability indicates that non-business use cannot be ruled out. However, the AO has not specifically mentioned which vouchers were defective and what kind of nonbusiness use company indulged into. The assessee is a private limited company and the expenditure had been incurred for its business purposes. In the absence of any specific defect, the disallowance made by AO is merely on surmises. There is no basis for the disallowance. Therefore, the AO is directed to delete the addition, accordingly grounds of appeal of the assessee are allowed. Addition of Travelling and conveyance Expenses - lack of the supporting and probability of non business purpose involved in it, the disallowance of 5% of travelling expenses is made - HELD THAT:- As it is an admitted fact by the Ld.CIT(A) that no specific defect was pointed out by the AO. Thus, the disallowance is based on surmises. The AO has failed to prove that the expenditure was not incurred wholly and exclusively for business purpose. Hence, the AO is directed to delete the disallowance - Accordingly, grounds of appeal of the assessee are allowed.
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