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TMI Blog2016 (5) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... ot have tendency of always having some suspicion, doubt and should not draw unreasonable inference based on some unreasonable apprehensions. The hon'ble High Court even observed that if there is some personal expenses incurred for personal use, it is for saving of time. Further, in this case, regular books of account have been maintained and audited under section 44AB of the Act. No adverse inference has been drawn by the auditor. Taking the guidance of various judicial pronouncements, we concur with the findings of higher judicial authority that the tax authorities must consider the claims in reasonable and practical manner. The disallowance of petty nature of expenses makes hardly any impact on overall revenue collection but such disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Mad) (Appeal No. 896 of 2013, dated April 16, 2014) he should have deleted the additions in full because it has been held that no personal nature of expenses was proved. (3) That since the learned Commissioner of Income-tax (Appeals) appreciated the fact that the aforesaid judgment is applicable to the facts of the instance case, he should have applied the same in entirety and is not justified in retaining the disallowance of ₹ 1,00,000 out of the same. (4) That the statement of facts and ground of appeal submitted before the learned Commissioner of Income-tax (Appeals), along with Form 35 may kindly be considered as a part of this ground of appeal. 2. Although the assessee has raised multiple grounds of appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs have been produced. Keeping in view of the nature of expenses claimed by the assessee, the Assessing Officer disallowed 10 per cent. of total claim in the absence of original vouchers and added ₹ 1,52,736 to the total income of the assessee. Being aggrieved, the assessee carried the matter on appeal before the learned Commissioner of Income-tax (Appeals). 5. Before the learned Commissioner of Income-tax (Appeals), it was submitted by the assessee that no businessman can be prevented from spending moneys on the staff members employed by him/her. The Assessing Officer has not explained how the staff members did not benefit from the impugned expenditure nor has he unearthed evidences incriminating the assessee. The non-production o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll such personal use or expenses are in the course of business and are normal business expenses. Some benefits or privilege might have been derived by officers, staff, etc., that does not make expenses incurred by a large organisation as personal expenses. Similar will be the case of telephone and car expenses, even if some personal used is made, it is for saving of time. Time saved can be used more profitably for business purposes. The tax authorities must also consider claims and allow expenditure in a business-like manner considering the ground realities. They should not have tendency of always having some suspicion, doubt and should not draw unreasonable inferences based on some unreasonable apprehensions. They must place themselves in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of S. Gurlal Singh Tuli v. Asst. CIT [2000] 73 ITD 365 (Nagpur), it was held that the Assessing Officer and the learned Commissioner of Income-tax (Appeals) having failed to give strong and sufficient reasons to indicate that the books of account of the assessee were unreliable, incorrect or incomplete accounts could not be rejected and no addition could be made to the returned income simply on the basis of a genera! allegation that the expenses were not verifiable, particularly when the assessee has shown better results than in past. In the case of Lavrids Knudsen Maskinfabrik (India) Ltd. v. Addl. CIT [2006] 102 TTJ (Pune) 882, it was held that estimated ad hoc addition based on suspicion and surmises should be deleted. 7. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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