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TMI Blog2022 (7) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be allowed in toto and the disallowance made at 50% of the total expenditure shows an ad hoc approach on the part of the AO based on presumption, assumption and surmises. Similarly, the ld. CIT(A) has confirmed the order of the AO without giving a valid reason as to how the ad hoc disallowance of 50% could be sustained. In view of these facts, we are not in agreement with the conclusion drawn by the CIT(A) and consequently the order of the CIT(A) cannot be sustained. The ld. Assessing Officer is directed to delete the disallowance. Ground No.1 and 2 are allowed. Addition on account of dividend earned from business and held by the assessee as stock-in-trade - AO held that dividend received on shares and securities held as stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed. - ITA No. 43/Kol/2022 - - - Dated:- 12-7-2022 - SHRI RAJPAL YADAV , VICE PRESIDENT AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER Appellant by : Shri Akkal Dudhewala , FCA Respondent by : Shri Biswanath Das , Addl. CIT-DR. ORDER PER RAJESH KUMAR , ACCOUNTANT MEMBER : The present appeal by the assessee is directed against the order dated 12.12.2021 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeals Centre [hereinafter referred as the CIT(A) ] which in turn arises out of the assessment framed u/s 143(3) of the Income Tax Act (hereinafter referred to as the Act ) vide order dated 22.12.2018 passed by the Assistant Commissioner of Income Tax(Appeals), Circle-12(1), Kolkata (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O be directed to delete the addition of Rs.27,98,868/- in full. 5. For that the appellant craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before. 2. The issue raised in Ground No.1 2 is directed against the order of CIT(A) confirmed the addition of Rs.1,88,000/- as made by the Assessing Officer by disallowing 50% of the foreign travel expenses of the director. The facts in brief are that the Assessing Officer during the course of assessment proceedings observed from the details filed by the assessee that the assessee has incurred an expenditure of Rs.3,76,000/- on foreign travel and the assessee was called upon to furnish details f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption, assumption and surmises, is not sustainable. 4. After hearing the rival contentions and perused the materials on record, we note that both the authorities below have not doubted at all the genuineness of the foreign expenses. We also note that the disallowance is made at the whims of the Assessing Officer without pointing out any specific reason. In case the expenditure is not connected with the business of the assessee, it has to be allowed in toto and the disallowance made at 50% of the total expenditure shows an ad hoc approach on the part of the Assessing Officer based on presumption, assumption and surmises. Similarly, the ld. CIT(A) has confirmed the order of the Assessing Officer without giving a valid reason as to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. 6. In appeal, the assessee before the ld. CIT(A) submitted that income of shares and securities held as stock-in-trade is exempt u/s 10(34) of the Act as it had already been subjected to tax u/s 115 of the Act. However, the reply of the assessee did not find favoured with the CIT(A) and ld. CIT(A) after rejecting the contention of the assessee confirmed the order of the Assessing Officer on this issue by holding that Assessing Officer has already allowed 10(34) exemption to the dividend income attributable to investment in shares and securities. 7. We have head the rival contentions and perused the materials on record. The provisions of the Act u/s 10(34) and 115 of the Act, we note that the impugned premise of the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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