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TMI Blog2014 (4) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee were very much relevant and necessary for the just and proper decision of the case - All the receipts as per AIR information except the receipt of Rs.4,975/- were reconciled by the assessee before the CIT(A) - The assessee has also given a reasonable explanation of regarding the non-reconciliation of the remaining meager amount – thus, the action of the CIT(A) in rejecting the confirmations/reconcilement of the amount was not justified – Decided in favour of Assessee. Disallowance on account of premium paid for professional indemnity insurance - Personal insurance of the partners – Held that:- The firm is providing professional services and as such the professional indemnity insurance premium thus was related to the professional a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer (AO) on the basis of difference between information gathered from the Annual Information Return and professional receipts as per books of account. 2. Professional Indemnity Insurance The learned CIT(A) erred in confirming the addition of Rs.2,10,000 made by the AO on account of professional indemnity insurance premium on the basis that the same represents personal insurance of the partners. 3. Adhoc disallowances in respect of expenditure incurred on travelling, motor-car and telephone The learned CIT(A) erred in restricting the disallowance to 1/10th of the expenditure as against 1/5th made by the AO in respect of expenses incurred on travelling, motor-car and telephone. Ground No.1 2. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount to furnishing of additional evidence. He further observed that the assessee had not been able to furnish reasons as to why the same was not furnished before the AO he therefore rejected the said evidence produced by the assessee and confirmed the additions so made by the AO. 3. We have heard the rival submissions put forth by the learned representatives of both the parties and gone through the relevant material available on record. In our view, while refusing to take into consideration the relevant documents which were very much necessary for the just decision of the case, ld. CIT(A) failed to exercise his appellate jurisdiction u/s 250 of the Act. The duty was also cast upon the ld. CIT(A) to admit and consider the evidence prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejecting the confirmations/reconcilement of the amount was not justified. Accordingly, this ground of appeal is decided in favour of the assessee and the additions made by the AO and further confirmed by the ld. CIT(A) relating to the above issues are hereby ordered to be deleted. Ground No.2 5. Ground No.2 relates to the disallowance on account of premium paid for professional indemnity insurance. The AO disallowed the insurance premium expenditure of Rs.2,10,000/- observing that the said expenditure was made on the life insurance of the partners of the firm. Since the above payments were made on the personal insurance of the partners and the expenses were not related to the professional activity of the assessee firm he therefore d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the personal use of motor car and telephone and personal expenses in respect of travelling were not ruled out. He therefore restricted the same to the 1/10th of the total expenses. 10. Before us the ld. A.R. has relied upon an authority of the Tribunal in the case of M/s. Arthur Andersen and Company in ITA No.483/M/06 etc. decided on 23.07.10 and stressed that in para 35 of the said order, the Tribunal has observed that the submissions of the assessee that the expenditure under the head salaries has been reduced and consequently the professional fees has increased were ignored by the AO while making the disallowance in relation to motor car expenses, telephone expenses etc. and the said disallowance was set aside by the Tribunal for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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