In the present case, the Assessing Officer (AO) disallowed the ...

Pharmacist's expenditure fully deductible for dispensing medicines, AO lacks jurisdiction for ad-hoc disallowance.

Case Laws Income Tax

August 22, 2024

In the present case, the Assessing Officer (AO) disallowed the expenditure claimed u/s 57(iii) of the Income Tax Act on an ad-hoc basis. The AO did not challenge the genuineness of the expenditure and acknowledged the submission of bills and vouchers. Section 57(iii) allows deduction of any expenditure incurred wholly and exclusively for earning income, provided it is not a capital expenditure. The AO did not contend that the expenditure was capital in nature. The assessee earned income from dispensing medicines, and the expenditure was incurred in relation to this income-earning activity. The AO did not doubt that the expenditure was not incurred for earning income. Relying on the Petroleum Sports Promotion Board case, the Appellate Tribunal held that the AO lacked jurisdiction to make an ad-hoc disallowance of 50% of the expenditure without pointing out any defect in the bills, vouchers, or ledgers. Consequently, the Tribunal directed the AO to delete the addition made, allowing the assessee's ground.

View Source

← Previous Next →

In the present case, the Assessing Officer (AO) disallowed the ...

Pharmacist's expenditure fully deductible for dispensing medicines, AO lacks jurisdiction for ad-hoc disallowance.

Case Laws Income Tax

August 22, 2024

You may also like:

Disallowance of expenses when the business was not fully functional - - Nowhere in the order of the AO there is a whisper as to how the expenditure is excessive and how...

TP Adjustment - Disallowance of expenditure u/s 40(a)(ia) - any expenditure not for the purpose of business, the A.O. can certainly re-characterize the same as not...

Revenue expenditure versus capital expenditure - expenditure incurred on ERP Software – allowed as revenue expenditure - AT

Payment for know-how - deductible under Section 37 as a Revenue expenditure OR Section 35AB? - said expenditure qualifies for deduction u/s 37 - HC

AO failed to conduct proper inquiries regarding genuineness of loan transactions for property acquisition. Bank statements revealed assessee lacked funds, payments made...

The ITAT Kolkata examined the validity of reassessment proceedings based on "reasons to believe" u/s 147. The AO's reasons lacked independent application of mind, being...

Revision u/s 263 - lack of inquiry by AO - it is a case where the AO did not make any inquiry vis-à-vis the share premium and simply accepted the details filed by the...

The ITAT, an Appellate Tribunal, addressed the re-computation of long-term capital gain related to determining the cost of improvement for constructing a concrete bridge...

Nature of expenditure - Revenue expenditure or capital expenditure - expenditure incurred by the Appellant for raising floor height of Godown - The expenditure so...

TP Adjustment - PLI computation - if rental expenditure is considered as an operating expenditure, then the reimbursement should be set off against the rental...

Business expenditure u/s.37(1) - share issue expenses - assessee has abandoned the proposal to issue shares at later stage - when the nature of expenditure incurred by...

Disallowing social welfare expenditure - expenditure incurred under the head Social Welfare Expenditure for construction of houses to flood victims is in the nature of...

When the expenditure was not recorded in the books of account and the assessee failed to offer satisfactory explanation about the nature and source of such expenditure,...

Entertainment tax subsidy - capital or revenue receipt - disallowance u/s. 37 - AO made ad hoc disallowance u/s. 37 @ 10% of expenditure. However, the said disallowance...

This case deals with the disallowance of expenditure u/s 14A of the Income Tax Act, which pertains to expenditure incurred in relation to exempt income. The key points...

Quick Updates: