TMI Blog2013 (3) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... out any specific defects on the vouchers and the disallowance was made on an adhoc basis - accounts were duly audited by the auditor under company’s act - Moreover, merely because in the opinion of the AO, the expenses are excessive, it cannot be a ground for disallowance - Decided in favoe of assessee - ITA No. 942/Del/2011 - - - Dated:- 22-3-2013 - SHRI G.D.AGRAWAL, VICE PRESIDENT AND SHRI I.C.SUDHIR, JUDICIAL MEMBER For the Appellant: Shri Kapil Goel, CA. For the Respondent: Shri Tarun Seem, Sr.DR. ORDER PER G.D.AGRAWAL, VP: This appeal by the Revenue is directed against the order of learned CIT(A)-I, New Delhi dated 29th November, 2010 for the AY 2006-07. 2. Ground No.1 of the Revenue s appeal is general i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this purpose, the Assessing Officer has to make out the case. Therefore, the expenditure incurred by the directors for the purpose of business could not be disallowed. There is nothing in the assessment order to suggest that expenditure incurred by the assessee was not in the nature of business expenditure. Accordingly, we do not find any infirmity in the order of ld.CIT(A) deleting the addition. 5. Since the facts of the year under consideration are identical, respectfully following the above decision of ITAT in assessee s own case, we uphold the order of learned CIT(A) and reject ground No.2 of the Revenue s appeal. 6. Ground No.3 of the Revenue s appeal reads as under:- On the facts and in the circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance was mainly reimbursement of expenses on conveyance incurred by the employees to the tune of ₹ 23,33,040/- as explained by the appellant. Therefore, the conclusion drawn by the AO is not based on correct fact and hence disallowance made on this account can not be sustained. The AO is directed accordingly. 10. The Revenue has accepted the above finding of learned CIT(A) though appeal was filed against the said order of learned CIT(A) on another ground. Since the Revenue has accepted the order of learned CIT(A) on the identical facts in AY 2005-06, we do not find any justification in the Revenue s stand for challenging the deletion of disallowance of car maintenance expenses in this year. Moreover, we also find that learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 15829791 In view of the nature of the expenses claimed and since no business expediency for claim of these expenditures has been given, 25% of the aforesaid expenses, which comes to ₹ 3957448/-, being of non-business nature would be disallowed while computing the income of the assessee. 13. The learned CIT(A) deleted the disallowance with the following finding:- 7.2 Next ground of appeal is regarding disallowance ₹ 39,57,448/- on tour and traveling expenses on Defexo and Consultancy. During the assessment proceedings AO has made above addition on the ground that the expenses claimed by the appellant of ₹ 14,11,02,830/- is very excessive on a sales of ₹ 9,20,91,331/- disclosed by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses cannot be allowed. Moreover, merely because in the opinion of the Assessing Officer, the expenses are excessive, it cannot be a ground for disallowing 25% of the expenditure. If the expenditure incurred is excessive, the proper course is to examine those expenses in detail and if it is found that part of the expenditure is not incurred for the purpose of business, or it is not supported by evidence, then such portion can be disallowed. However, ad-hoc disallowance of 25% merely on the basis of suspicion and presumption cannot be sustained. Moreover, the learned CIT(A) has recorded a finding that the assessee has produced all vouchers and details regarding these expenses and the expenses have been incurred for the purpose of business. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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