Assessee's Appeal Allowed, Disallowances Overturned The Tribunal allowed the appeal of the assessee, setting aside the disallowances imposed by the Assessing Officer and partially upheld by the CIT(A). The ...
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The Tribunal allowed the appeal of the assessee, setting aside the disallowances imposed by the Assessing Officer and partially upheld by the CIT(A). The Tribunal found the disallowances to be arbitrary, noting that no specific defects in vouchers were highlighted by the Assessing Officer. The decision was pronounced in open court on 11/01/2018.
Issues: Appeal against disallowance of expenses related to staff welfare, pooja expenses, postage, telegram & telephone expenses.
Analysis: 1. The appeal was filed against the order of CIT(A) dated 29/06/2016 regarding the disallowance of various expenses by the Assessing Officer. The appellant contended that the disallowances were ad hoc without specific defects in the books of account or vouchers. It was argued that since the books of account were not rejected, such disallowances were unwarranted, citing relevant case laws in support.
2. The Assessing Officer had disallowed expenses claiming that vouchers were not properly vouched and major expenses were supported by self-made vouchers. However, no specific defects in vouchers were pointed out by the Assessing Officer. The appellant, before the CIT(A), reiterated that no defects were identified in the vouchers and relied on case laws. The CIT(A) reduced the disallowance from 10% to 5% based on submissions but did not provide reasons for partially confirming and partially allowing the additions.
3. The Tribunal noted that the disallowances sustained by the CIT(A) were not justified as no specific defects in vouchers were highlighted by the Assessing Officer. The Tribunal found the disallowances to be arbitrary and allowed the appeal of the assessee, concluding that the disallowances upheld by the CIT(A) were not in order.
4. Ultimately, the appeal of the assessee was allowed by the Tribunal, setting aside the disallowances imposed by the Assessing Officer and partially upheld by the CIT(A). The decision was pronounced in the open court on 11/01/2018.
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