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Issues involved: The issues involved in this judgment are related to the deduction claimed u/s 80IA of the Income Tax Act and the disallowance of expenses on account of telephone and travel expenses.
Deduction u/s 80IA: The assessee, engaged in the business of Travel and telecommunication services, claimed a deduction u/s 80IA in the return of income. The Assessing Officer (A.O.) denied the deduction stating that the assessee did not qualify the basic conditions laid down u/s 80IA. The CIT (A) granted partial relief to the assessee, allowing the deduction. The Revenue appealed against this decision. The Tribunal upheld the order of the CIT (A) based on consistent views taken in earlier years by the Tribunal, stating that the assessee was providing basic telecommunication services and hence entitled to the deduction u/s 80IA. Disallowance of Expenses: The A.O. made a lump sum disallowance out of telephone and travel expenses, suspecting personal use in incurring these expenses. The CIT (A) restricted the disallowance to a lower amount after considering the explanation offered by the assessee. The Revenue appealed against this order. The Tribunal found that the A.O. made the disallowance on an adhoc basis without specific instances of personal expenses being pointed out. As the Revenue failed to prove that the expenses were personal in nature, the Tribunal upheld the order of the CIT (A) and dismissed the appeal of the Revenue. In conclusion, the Tribunal upheld the deduction u/s 80IA for the assessee based on consistent views taken in earlier years and dismissed the Revenue's appeal regarding the disallowance of expenses, as the Revenue failed to prove personal nature of the expenses.
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