Entertainment tax subsidy - capital or revenue receipt - ...

Income Tax

June 25, 2022

Entertainment tax subsidy - capital or revenue receipt - disallowance u/s. 37 - AO made ad hoc disallowance u/s. 37 @ 10% of expenditure. However, the said disallowance was not added by AO in the assessment order because the AO has added entire entertainment subsidy as capital receipt. This is an ad hoc disallowance. AO has not pointed out any specific expenditure which was in the nature of revenue expenditure. AO cannot presume it. Therefore, the AO is directed to delete the said disallowance - AT

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Entertainment tax subsidy - capital or revenue receipt - ...

Income Tax

June 25, 2022

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Nature of receipt – Entertainment tax – Revenue or capital receipt - the subsidy in respect of Multiplex located at Jaipur to be capital in nature. - AT

Disallowance on an ad-hoc basis - in the absence of necessary documentary evidence the AO had no alternative except to make the disallowance on an ad-hoc basis.

Ad hoc disallowance of 10% of expenses - Since the AO or the Ld. CIT(A) has not rejected the books of account of the assessee they could not have estimated (ad hoc...

Discount to customers - Merely because the receipt vouchers were made by the assessee cannot be a ground to make ad hoc disallowance out of the claim of discount - AT

Nature of receipt under the subsidy scheme - Multiplex Theatre Complexes - exemption of entertainment duty - the receipt is in the nature of capital receive - not taxable - SC

Leakage of revenue - Any disallowance should be specific and properly quantified - presumptive and ad-hoc addition based on an outlandish consideration of plugging...

Nature of subsidy received - Capital or revenue receipt - amount given as subsidy to meet any revenue expenditure can safely be termed as revenue receipt - HC

Ad-hoc disallowance at the rate of 10% on credit card expenses - Prima Facie the said disallowance is ad-hoc in nature. AO ought to have made reference to any of such...

Ad-hoc disallowance - the AO has not followed the procedure prescribed by the statute and therefore, he violated the principle of “Rule of Law” and the action of the AO...

Addition made on account of unaccounted cash receipts – Cash receipts of brokerage – Sale of car parking charges - the assessee’s purchases cannot be doubted on ad-hoc basis - AT

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