TMI Blog2020 (11) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... of hearing to the assessee and shall take a decision in accordance with law. Disallowance towards travelling and office maintenance expenditure - CIT(A) confirming the disallowance to the extent of 50% of the total expenditure - HELD THAT:- CIT(A) was of the view that the assessee having admitted that there was a temporary lull in the business affairs of the assessee, there was no necessity for incurring such huge expenditure. Accordingly, he has made adhoc disallowance of 50% of the total expenditure claimed as deduction. We are of the view that the matter needs to be examined by the Assessing Officer de novo since both the A.O. and the CIT(A) have not considered the evidence / details, while drawing conclusions on the said issue. Accordingly, this issue is also restored to the files of the A.O. In the instant case, the CIT(A) had already held that the business of the assessee had not stopped. Accordingly, CIT(A) allowed 50% of the total expenditure. Therefore, the ratio of the judgments relied on by the assessee in its paper book does not have application to the facts of this case. Appeal filed by the assessee is partly allowed for statistical purposes. - ITA No.468/B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mine of the assessee. However, the CIT(A) disallowed 50% of the total expenditure of ₹ 18,02,992, since according to the CIT(A), the assessee did not furnish any evidence in the form of number of plants purchased, nature of saplings used and the extent to which the areas are planted etc. 3.3 Aggrieved by the order of CIT(A), the assessee has preferred this appeal before the Tribunal. The assessee has filed a paper book comprising of 40 pages inter alia enclosing therein copy of written submissions filed before the CIT(A), reply to the notice received from the Assessing Officer, financial statement for the assessment year 2013-2014 and the judicial pronouncements relied on. The learned AR reiterated the submissions made before the Income Tax Authorities. 3.4 The learned Departmental Representative, on the other hand, submitted that the CIT(A) is justified in restricting the claim of deduction to 50% of the total expenditure because the assessee did not furnish any evidence to prove that it had incurred such expenses. It was contended by the learned DR that the CIT(A) was generous in granting 50% of the total expenses claimed in the absence of proof for incurring such exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee has debited amounts of ₹ 19,45,509/- and ₹ 10,64,763/- respectively to the P L account under the head Other expenses. The assessee has claimed the said expenses against interest income, earning of which does not require such a huge expenditure to be incurred. Though I am of the view that these expenses are not required to be incurred for earning interest income and ought to be disallowed, I am of the reasonable belief that the expenses incurred can be allowed to the extent incurred in earlier year as the same were accepted and allowed during course of assessment proceedings for A.Y.2013-14, and accordingly the excess expenditure claimed in the respective heads for Assessment Year 2014-15 is disallowed u/s 37(1) of the Act and added back to the income returned by assessee and brought to tax. The total disallowance u/s 37(1) of the Act is worked out as under: Nature of expense Amount debited by assessee for AY 2014-15 Amount debited by assessee for AY 2013-14 Excess amount disallowed Travelling expenses ₹ 19,45,509 ₹ 5,57,523 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the A.Y. 2014- 15. 4.2 Aggrieved by the order of the CIT(A), the assessee has filed this appeal before the Tribunal. The learned AR submitted that the adhoc disallowance made by the CIT(A) is not justified since both the A.O. and the CIT(A) have not found any defect in the books of account maintained by the assessee. 4.3 The learned Departmental Representative supported the order of the CIT(A). It was submitted that the restriction of disallowance to 50% of the total expenditure is justified in the facts and circumstances of the case as there was no reason for the assessee for incurring such huge expenses when the assessee s business had been temporarily stopped. 4.4 We have heard the rival submissions and perused the material on record. Both the Assessing Officer and the CIT(A) have not examined in detail how the assessee had incurred these expenses. The A.O. was of the view that the assessee had earned only interest income and there was no reason for such a huge expenditure being incurred by the assessee. However, the A.O. allowed the deduction, which is allowed in the previous assessment year, i.e., A.Y. 2013-14. The CIT(A) was of the view that the assessee having a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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