Tribunal allows appeal, directs deletion of disallowed TDS, income mismatch, and travelling expenses

The Tribunal allowed the appeal of the assessee, directing the AO to delete the disallowed amounts related to TDS payable as an expense, income mismatch, and adhoc disallowance of travelling expenses. The Tribunal found in favor of the assessee on all grounds, citing previous favorable judgments and lack of proper inquiry and evidence for disallowances.

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Issues Involved:
1. Disallowance of TDS payable as an expense.
2. Disallowance of TDS and income mismatch.
3. Adhoc disallowance of travelling expenses.

Issue 1: Disallowance of TDS payable as an expense:
The appeal was against an order disallowing Rs. 87,800 as TDS payable. The Assessing Officer (AO) disallowed this amount due to the cash system of accounting followed by the assessee. The CIT(A) upheld this disallowance citing provisions of section 43B of the Income Tax Act, stating that TDS payable but not paid in the current financial year is not an allowable expense. The appellant argued that TDS was paid before the due date, citing previous favorable judgments. The Tribunal found in favor of the assessee, directing the AO to delete the disallowed amount.

Issue 2: Disallowance of TDS and income mismatch:
The AO disallowed Rs. 10,18,500 as income against undisclosed TDS of Rs. 1,01,850. The CIT(A) observed that the appellant failed to provide sufficient details. The appellant claimed to follow a cash system of accounting and submitted reconciliation statements. The Tribunal directed the AO to verify the details provided by the assessee, allowing the grounds for statistical purposes pending verification.

Issue 3: Adhoc disallowance of travelling expenses:
An adhoc disallowance of travelling expenses was made by the AO and sustained by the CIT(A) at 10%. The Tribunal found such disallowances without proper inquiry and evidence unsustainable. Previous disallowances in the assessee's case were deleted due to lack of evidence of disproportionate expenses. The Tribunal directed the AO to delete the disallowance, ruling in favor of the assessee.

In conclusion, the Tribunal allowed the appeal of the assessee based on the favorable determination of grounds related to TDS disallowance, income mismatch verification, and travelling expenses disallowance. The Tribunal directed the AO to delete the disallowed amounts and disallowances, respectively, in accordance with the findings.

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