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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SRI MAHAVIR SINGH
O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / PER MAHAVIR SINGH, VP: This appeal of the assessee is arising out of order of the Commissioner of Income Tax (Appeals)]-34, Mumbai [in short CIT(A)], in appeal No. CIT(A)-34/ITO-22(1)(3)/IT-10043/16-17 vide dated 04.06.2019. The Assessment was framed by the Income Tax Officer, Circle-22(1)(3), Mumbai (in short ITO/ AO) for the A.Y. 2013-14 vide order dated 16.03.2016 under section 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’).
The first issue in this appeal of assessee is against the order of CIT(A) confirming the disallowance of expenses amounting to ₹73,574/-. For this, assessee has raised the following ground:- “Section 37(1) of the Income Tax Act, 1961:-
2 Shri Faredoon Edal Desai; AY 13 -14 Disallowance of Expenses The learned AO erred in disallowance of the expenses of ₹73,514/- which is business expenditure and the documents related to the same were produced before the Assessing Officer.”
I have heard both the sides and gone through the facts and circumstances of the case. I noted that the assessee is in the business of insurance and proprietor of Ahura Insurance Inc. and claimed the following expenses:-
Sr. No. Nature of expenses Amount of % Amount expenditure claimed Disallowed disallowed 1. Staff Welfare 89,025/- 10% 8,902/- 2. Petrol expenses 2,24,220/- 10% 22,422/- 3. Travelling expenses 14,592/- 10% 1,459/- 4. Advertisement 26,091/- 10% 2,609/- Expenses 5. Conveyance 2,13,980/- 10% 21,398/- 6. Sales Promotion 31,910/- 10% 3,91/- 7. Office expenses 1,35,331/- 10% 13,533/- 4. The Assessing Officer disallowed 10% of expenses by treating that there is a possibility of personal element. But no other reasons were adduced. The CIT(A) simply confirming the action of the Assessing Officer. I noted from the above expenses that the Assessing Officer has just disallowed by estimating at 10% being personal in nature but neither the Assessing Officer nor CIT(A) has given any finding that how and by what nature it is personal. Since, this is adhoc disallowance, I delete the disallowance and allow the issue of assessee’s appeal.