TMI Blog2022 (9) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... re allowed to the customer in the ordinary course of business which has been accounted for by the assessee in the books of account which were produced before us. We note that the number of entries of discount allowed ran into 7,327/-. We note that discounts were allowed during the mobile recharge for which there was no separate voucher available in the business of assessee. The authorities below have failed to justify and reason disallowance of 40% of the total expenditure and the conclusions of both the authorities are based upon the surmises and conjectures which is not permissible under the Act. Accordingly we set aside the order of CIT(A) on this issue and direct the AO to delete the addition. Appeal of the assessee is partly allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very small amounts of discountswere allowed account which could not be properly verified and vouched except notings on the vouchers and no such expenditure was incurred in the earlier year and thus disallowed 40% of the said expenditure thereby disallowing and adding Rs. 5,75,964/- to the income of the assesse. 4. In the appellate proceedings, the Ld. CIT(A) affirmed the order of AO by holding that in order to claim expenditure u/s 37 of the Act ,the assessee has to prove the genuineness of the expenditure that the said expenditure were in connection with business of the assessee. The Ld. CIT(A) also noted that apart from the above it has to be proved that the expenditure are neither personal nor capital in nature and also not prohibited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his fact we deem it fit to make an ad hoc disallowance of 5% of these expenses towards personal expenditure. Consequently we modify the order of Ld. CIT(A) and direct the AO to delete the addition to the extent of Rs. 3,40,914/- and thus addition to the tune of Rs. 17,943/- is sustained. Further in respect of discount, we note that the assessee is in the business of selling mobile recharge in which the discounts are allowed to the customer in the ordinary course of business which has been accounted for by the assessee in the books of account which were produced before us. We note that the number of entries of discount allowed ran into 7,327/-. We note that discounts were allowed during the mobile recharge for which there was no separate vou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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