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2021 (7) TMI 436 - AT - Income TaxDisallowance of 10% of expenses in nature of staff welfare expenses conveyance expenses, general expenses and office maintenance expenses - HELD THAT - We notice that the AO disallowed the various expenses incurred by the assessee by observing that all the expenses were incurred by the assessee are booked by way of self-made vouchers and in some cases payments are made in cash and not supported by proper bills. Accordingly, he disallowed 10% of the total expenses. This issue was already considered by the Co-ordinate Bench and reduced the disallowance from 10% to 5% in assessee s own case in assessment year 2019 (8) TMI 1726 - ITAT MUMBAI By respectfully following the above decision we are also inclined to direct the Assessing Officer to disallow only 5% of the total expenses. Accordingly, the amount raised by the assessee are allowed.
Issues:
Delay in filing appeal, Disallowance of expenses incurred by the assessee Delay in Filing Appeal: The appeal was filed by the assessee with a delay of 78 days. The assessee admitted the delay and provided reasons for it. The Tribunal considered the submissions, condoned the delay, and proceeded to hear the appeal. Disallowance of Expenses Incurred by the Assessee: The Assessing Officer disallowed various expenses incurred by the assessee, citing that they were booked with self-made vouchers and some payments were made in cash without proper bills. The AO disallowed 10% of the total expenses. The assessee, in response, argued that the expenses were for business purposes, audited by the auditors without discrepancies, and produced bills for verification. However, the CIT(A) sustained the addition as the assessee failed to submit bills and vouchers for verification during the appellate proceedings. The Tribunal noted a previous decision where a similar issue was addressed, reducing the disallowance from 10% to 5%. Therefore, the Tribunal directed the Assessing Officer to disallow only 5% of the total expenses, following the previous decision. In conclusion, the appeal filed by the assessee was allowed, and the Tribunal pronounced the order on 08/06/2021.
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