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2017 (9) TMI 2019 - ITAT MUMBAIAllowable business expenditure - expenditure on gradation & certification of diamonds - absence of correlation of the expenditure on gradation & certification of diamonds with the sale and stock of diamonds - CIT (A) restricting the disallowance of such expenditure to 30% - HELD THAT:- As pointed out by the CIT(A) the assessee has produced the party wise details of grading and certification charges along with ledger statements. The payments were made after deducting tax at source. CIT(A) has rightly pointed out that grading and certification are the essential part of business and how much expenditure was required to be made on certification and grading was to be decided by the assessee. AO has not made any comparison to falsify the claim of the assessee. Since, payments to the parties are not in dispute, ad hoc addition cannot be made without establishing that either the transaction was sham or the expenditure was made for the purposes other than the business of the assessee. Hence, we do not find any reason to interfere with the order passed by the Ld. CIT(A). The order passed by the Ld. CIT(A) is upheld and all the grounds of appeal of the revenue are dismissed.
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