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2016 (6) TMI 481 - ITAT MUMBAI

2016 (6) TMI 481 - ITAT MUMBAI - TMI - Disallowance of sundry expenses - Held that:- We are of the considered view that the disallowance out of sundry expenses is quite reasonable as made by the CIT(A) keeping in view the facts and circumstance of the case, that the element of personal usage cannot be ruled out and as well vouchers are self made vouchers as set out above in preceding para’s. We donot find any infirmity in the orders of the CIT(A) with respect to disallowance towards the sundry e .....

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ue needs to be set aside to the file of CIT(A) for fresh adjudication after giving proper notice of hearing to the assessee with respect to proposed enhancement of income and after giving proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law. - Decided in favour of assessee allowed for statistical purposes. - I.T.A. No. 5088/Mum/2014 - Dated:- 29-4-2016 - Shri Saktijit Dey, Judicial Member And Shri Ramit Kochar, Acc .....

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s 143(3) of the Income Tax Act,1961(hereinafter called the Act ). 2. The grounds raised by the assessee in the memo of appeal filed with the Income Tax Appellate Tribunal, Mumbai (hereinafter called the Tribunal ) read as under:- 1. On the facts and in the circumstances of the case and in law, the Honourable CIT(A) has erred in confirming adhoc disallowane of Sundry Expenses of ₹ 50,000/- u/s. 37 of the Income Tax Act, 1961. He ought not to have done so. 2. On the facts and in the circumst .....

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ction 251 of the Income Tax Act, 1961. He ought to have given opportunity to show cause against such enhancement. 4. Your appellant company craves leave to add, to amend, to modify any of the aforesaid grounds or take an additional ground of appeal, if need be. 3. The brief facts of the case are that the assessee is a firm of Chartered Accountants. The assessee s source of income consists of income from business or profession and income from other sources. The assessee has claimed ₹ 12,22, .....

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/s. 143(3) of the Act. 4. The assessee has claimed ₹ 8,72,600/- towards foreign travel expenses. The assessee was asked by the AO to submit documents in support of the claim. The assessee submitted only break-up of the expenses without any supporting bills/vouchers. As per the AO the nature of expenses are such that personal element cannot be ruled out and in view of this 20% of the above expenses to the extent of ₹ 1,74,520/- was disallowed and added back to the total income of the .....

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assessee before the CIT(A). The CIT(A) called for the remand report from the AO under Rule 46A of Income Tax Rules, 1962, whereby all details and supporting documents were forwarded by the CIT(A) to the AO. The AO furnished his comments in remand report that expenses of ₹ 45,000/- in respect of Diwali sweet and Pooja expenses, snacks, it was observed that though the bills are on record, the expenses are not incurred wholly and exclusively for business purpose. Water charges, wedding expen .....

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ended by the partners, employees and consultants along-with their spouses which as per the assessee cannot be held to be non-professional purposes since the employees and their family members have been traditionally participating in the said pooja and look forwards for this event and receiving sweets. Therefore, it was submitted by the assessee that it be considered to be part of staff welfare. With respect of the water charges expenses, it was submitted by the assessee that the expenses of S .....

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nveyance expenses of ₹ 2,03,400/- reimbursed to audit staff and tea, snacks , lunch expenses of ₹ 75,110/- reimbursed to all persons for working on holidays or weekends or outdoor work during lunch time. Such reimbursements were made on the basis of office vouchers. Staff welfare expenses also include special allowance of ₹ 1,32,755/- paid to staff, as per the terms of employment paid along with monthly salary. Thus it was requested by the assessee that the entire additions of .....

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the AO held that the travelling expenses incurred by the assessee is supported by vouchers but personal element cannot be ruled out. The assessee submitted that expenses included spouses expenses be allowed which are delegate fees as follows :- Delegate fee for Mrs. Kunte US$ ₹ 50,465/- Delegate fee for Mrs. Phadke US$ ₹ 50465/- Delegate fee for Mrs. Augstin US$ 1000 ₹ 46,155/- Visa fee charges ₹ 24,233/- Air fare for Mrs. Augstin ₹ 64900/- Total : ₹ 2,36,218/ .....

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s incurred wholly and exclusively for the purpose of business or profession and hence the disallowance was enhanced from ₹ 1,74,520/- to ₹ 2,36,218/-, vide orders dated 21.3.2014 passed by the CIT(A). 8. Aggrieved by the orders dated 21.03.2014 passed by the CIT(A), the assessee has filed the second appeal before the Tribunal. 9. The assessee reiterated the submissions as were made before the authorities below. The submitted that the sundry expenses of ₹ 50,000/- has been disal .....

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