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TMI Blog2020 (12) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the assessee. Undisputedly, during the year under consideration the assessee had earned an amount of ₹ 1,302/- as exempt income, whereas, the Assessing Officer has disallowed an amount of ₹ 2,03,746/-. Now, it is fairly well-settled, by virtue of ratio laid down in a plethora of judicial precedents that disallowance under section 14A r.w.r 8D cannot exceed the quantum of exempt income earned during the year. We direct the Assessing Officer to restrict the disallowance under section 14A r.w.r 8D to ₹ 1,302/-. Disallowance being expenses incurred towards salary paid to Peons, Sweepers, Cleaners etc .- HELD THAT:- The payment made to the sweeper and the person supplying water is reasonable, hence, needs to be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome amount of personal element may be involved considering the nature of expenditure, however, the disallowance at 20% is on the higher side. Accordingly, direct the Assessing Officer to restrict the disallowance to 10% of the expenditure claimed. Hence, this ground is partly allowed. - ITA No.1987/Mum/2019 - - - Dated:- 13-10-2020 - Shri Saktijit Dey, Judicial Member For the Appellant : None For the Revenue : Shri Udaya Bhaskar Jakke (DR) ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER SAKTIJIT DEY, JUDICIAL MEMBER; 1. This is an appeal by assessee against the order dated 28.01.2019 of ld. Commissioner of Income Tax (Appeals)-48, Mumbai [for short the ld. CIT(A)] for Assessment Year 2012-13. 2. When the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was unsuccessful. 5. I have heard the submissions of ld. Departmental Representative and perused the material available on record. As could be seen from the grounds raised, assessee s grievances are twofold. Firstly, before making disallowance, the Assessing Officer has not recorded any satisfaction and Secondly, the disallowance made under section 14A r.w.r 8D cannot exceed the exempt income earned during the year. As far as the first issue is concerned, I do not find any merit in the contentions of the assessee. It is evident, the assessee suo-motu has not computed any disallowance under section 14A r.w.r 8D, though she had earned exempt income during the year. Therefore, in absence of any suo-motu disallowance made by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aners and Peon ₹ 1,27,000/- (ii) Prakash Bhonsale - ₹ 1,49,500/- (iii) Shivaji Naik - ₹ 1,43,500/-. 8. The Assessing Officer disallowed the aforesaid expenditure on the reasoning that the vouchers submitted are undated and unsigned. The aforesaid disallowance made by Assessing Officer was also sustained by ld. CIT(A). 9. I have considered the submissions of ld. Departmental Representative and perused the materials on record. As could be seen from the submissions made by the assessee before the Assessing Officer, Shri Prakash Bhonsale and Shri Shivaji Naik were working with the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount of ₹ 36,000/- p.a. was paid to a Florist who makes garlands for God s Photos kept in office premises. 10. After considering the nature and purpose of such payment, I am of the view that the payment made to the sweeper and the person supplying water is reasonable, hence, needs to be allowed. However, payment made to the florist at ₹ 3000/-p.m. appears to be on the higher side. In my view, payment to the florist can reasonably be estimated at ₹ 2000/- p.m. working out to ₹ 24,000/- p.a. Therefore, the balance amount of ₹ 12,000/- out of the payment made to the Florist has to be disallowed. Thus, this ground is partly allowed. 11. In Ground No. 2, the assessee has challenged the disallowance of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1, the assessee has challenged the part disallowance of expenditure incurred on entertainment. 15. Briefly, the facts are, during the assessment proceeding, the Assessing Officer noted that the assessee has debited an amount of ₹ 78,370/- towards entertainment expenses. On verifying the bills/invoices furnished by the assessee, he was of the view that entertainment expenses may not have been incurred wholly and exclusively for the purpose of business. Accordingly, he disallowed an amount of ₹ 15,674/-, being 20% of the total expenditure claimed. Ld. CIT(A) also sustained such disallowance. 16. I have heard the ld. Departmental Representative and perused the material available on record. As could be seen from the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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