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TMI Blog2023 (1) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... is no basis for the disallowance. Therefore, the AO is directed to delete the addition, accordingly grounds of appeal of the assessee are allowed. Addition of Travelling and conveyance Expenses - lack of the supporting and probability of non business purpose involved in it, the disallowance of 5% of travelling expenses is made - HELD THAT:- As it is an admitted fact by the Ld.CIT(A) that no specific defect was pointed out by the AO. Thus, the disallowance is based on surmises. The AO has failed to prove that the expenditure was not incurred wholly and exclusively for business purpose. Hence, the AO is directed to delete the disallowance - Accordingly, grounds of appeal of the assessee are allowed. - ITA Nos. 1012 & 1013/PUN/2018 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , alleging the non-business use of the above expenses. 2. The learned CIT(A) erred in law and on facts in confirming the adhoc addition of Rs.4,63,900/-, being 50% of the addition made by the learned AO, amounting to Rs.9,27,800/- out of Sales promotion expenses , alleging the non-business use of the above expenses. 3. The learned CIT(A) erred in law and on facts in not appreciating that at the max, the alleged non-business element included in the disallowed travelling expenses and sales promotion expenses will be in the nature of benefit to employees and such benefit will be a deductible expense for the appellant anyway. 2. Brief facts of the case : The relevant part of the assessment order is reproduced here as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not even mentioned which voucher is defective. The ld.AR also submitted that the assessee is a company, therefore, there cannot be any personal element in such expenditures. 5. The ld.Departmental Representative(ld.DR) for the Revenue relied on the orders of the Lower Authorities. 6. We have heard both the parties and perused the records. Both these appeals were heard together. It is observed that the AO had made the disallowance out of Travelling Expenses on ad-hoc basis stating that pre-ponderance of probability indicates that non-business use cannot be ruled out. However, the AO has not specifically mentioned which vouchers were defective and what kind of nonbusiness use company indulged into. The assessee is a private limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of 10% of sales promotion expenses is made. 9. The Ld.CIT(A) has confirmed the disallowance. 10. We have heard both the parties and perused the records. The Ld.CIT(A) has specifically mentioned in the order that the AO has not pointed out any specific vouchers which is doubted. Thus, it is an admitted fact by the Ld.CIT(A) that no specific defect was pointed out by the AO. Thus, the disallowance is based on surmises. The AO has failed to prove that the expenditure was not incurred wholly and exclusively for business purpose. Hence, the AO is directed to delete the disallowance of Rs.7,06,350 and Rs.4,63,900/-. Accordingly, grounds of appeal of the assessee are allowed. 11. In the result, appeal of the assessee is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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