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M/s. Northpoint Centre of Learning Versus Income Tax Officer-15 (1) (4) Mumbai.

Ad-hoc disallowance at the rate of 5% of the total expenditure - Held that:- All the expenses were incurred against bills and for commercial expediency, thus, no disallowance is expected to be made u/s 37(1) of the Act. The assessee is a institution, thus, no ad-hoc addition is permitted unless and until it is proved otherwise. There is no recording of satisfaction by the Assessing Officer that the assessee made a bogus claim. There are no borrowed funds also, thus, to put an end to litigation, .....

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correctness of the claim of the assessee with respect to the expenditure incurred in relation to exempt income. Even if, the assessee claims that no expenditure was incurred in respect to exempt income, the Assessing Officer is supposed to follow the mandate of Rule-8D. Section 14A is called for when the Assessing Officer is not satisfied with the claim of the assessee having incurred no expenditure or some amount expenditure in relation to exempt income. Therefore, following the decision of jur .....

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K.Dhondial-DR O R D E R Per Joginder Singh (Judicial Member) The assessee is aggrieved by impugned order dated 22/10/2014 of the ld. First Appellate Authority, Mumbai, on the ground that the ld. Commissioner of Income Tax (Appeals) erred in confirming the ad-hoc disallowance at the rate of 5% of the total expenditure although the expenditure was incurred solely for the purpose of business and further confirming the ad-hoc disallowance u/s 14A amounting to ₹ 3,41,763/- made towards estimate .....

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advertising for post graduate residential students, declared income of ₹ 1890/- in its return filed on 07/10/2010. The assessee claimed ₹ 10,49,800/- to have been incurred for printing and stationary, telephone and travelling expenses for business purposes. The Assessing Officer suspected the genuineness of these expenditure by holding that there was element of personal use, thus, he made disallowance at the rate of 10% of such expenditure. On appeal, before the ld. Commissioner of .....

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ad-hoc disallowance was made by the Assessing Officer by suspecting that there is a element of personal use. However, the ld. Assessing Officer has not pinpointed that which expenses are of personal in nature. The assessee also produced the copy of the statement of account. The Assessing Officer was of the view that the genuineness of the expenses was also not proved. Before the ld. Commissioner of Income Tax (Appeals) and also before this Tribunal, the assessee produced the copy of the ledger .....

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o borrowed funds also, thus, to put an end to litigation, the disallowance is restricted to 2% against 5% sustained by the ld. Commissioner of Income Tax (Appeals). It is made clear that the observation made by the Bench is peculiar to the facts available to the impugned assessment year and may not be quoted for further reference. This ground of the assessee is partly allowed 3. The next ground pertains to ad-hoc disallowance of ₹ 3,41,763/- made towards estimated expenses, which as per th .....

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