2015 (6) TMI 1086

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..... aggrieved by impugned order dated 22/10/2014 of the ld. First Appellate Authority, Mumbai, on the ground that the ld. Commissioner of Income Tax (Appeals) erred in confirming the ad-hoc disallowance at the rate of 5% of the total expenditure although the expenditure was incurred solely for the purpose of business and further confirming the ad-hoc disallowance u/s 14A amounting to Rs. 3,41,763/- ma .....

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..... ficer suspected the genuineness of these expenditure by holding that there was element of personal use, thus, he made disallowance at the rate of 10% of such expenditure. On appeal, before the ld. Commissioner of Income Tax (Appeals), the disallowance was restricted to 5% of the claimed expenses incurred under various heads, thus, part relief was granted to the assessee against which, the aggrieve .....

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..... of the ledger account of various heads of expenses by claiming that such expenses were incurred wholly and exclusively for the purposes of business. All the expenses were incurred against bills and for commercial expediency, thus, no disallowance is expected to be made u/s 37(1) of the Act. The assessee is a institution, thus, no ad-hoc addition is permitted unless and until it is proved otherwis .....

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..... e Rules cannot ipso-facto, be applied to the facts of the present appeal. The ld. DR defended the addition. 3.1. I have considered the rival submissions and perused the material available on record. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respecti .....

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..... fore, to put an end to the litigation, I direct the ld. Assessing Officer to reduce the disallowance to Rs. 1 lakh in place of Rs. 3,41,763/- sustained by the ld. Commissioner of Income Tax (Appeals). Thus, this ground is partly allowed. Finally, the appeal of the assessee is partly allowed. This order was pronounced in the open Court on 11th June 2015.
Case laws, Decisions, Judgements, Orde .....

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