TaxTMI 
TaxTMI 
2011 (1) TMI 1055
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.... the source of income of the assessee was shown as commission received from M/s Cony Bio Health Centre (India) (P) Ltd. The AO found from the income and expenditure account submitted by the assessee in the return of income that the assessee claimed expenses under different heads of Rs. 13,07,755 against her commission income of Rs. 20,11,930. During the course of assessment proceedings, the assessee was unable to produce any evidence in support of her expenses claimed under different heads. Considering the facts and circumstances of the case 50 per cent of the expenses claimed i.e. Rs. 6,53,878 was disallowed by the AO and added to the income of the assessee. In appeal, the learned CIT(A) confirmed this action of the AO. 3. At the time o....
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.... course of the assessment proceedings explained in details the relevance of the expenses which were incurred wholly, necessarily and exclusively for the purpose of business which was not disputed by the AO. Therefore, in his opinion, the AO did not dispute the heads of expenses at all. According to him further, the assessee was not required under the law to maintain accounts as per section 44AA of the IT Act, 1961 and as such no adverse inference is, therefore, to be derived as a matter of course from the fact of lack of such precise documentation by an old and ailing person who was not able in the very nature of things to maintain and produce them. It was further contended that the nature and adequacy of expenses have to be judged with rel....
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....wance of the expenditure to the extent of 50 per cent in the sum of Rs. 6,53,838 which was upheld by the learned CIT(A) on similar lines, without considering the facts of the case in proper perspective with reference to the precedent and also past and subsequent years' results of the assessee, deserves to be deleted and he urged before the Bench to delete the same. 4. On the other hand, the learned Departmental Representative relied on the orders of the lower authorities and urged before the Bench to confirm the same. 5. We have heard the parties and perused the material placed on record. The assessee has filed a paper book which, inter alia, included statement of income and expenditure, intimation under section 143(1) of the Act, TDS....
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.... details of expenditure and statements of accounts, the assessee also could not produce any evidence in support of the expenditure. At the same time, as stated above, it is not the case of the Revenue that the assessee did not incur the expenditure at all. Therefore, in our considered opinion, some disallowance is necessary in the circumstances of the case. Therefore, we feel it prudent to adjudicate the matter in the light of the ratio as laid down in the case of Laxminarain Badridas (supra) wherein it was held as under : "The officer is to make an assessment to the best of his judgment against a person who is in default as regards supplying information. He must not act dishonestly or vindictively or capriciously because he must exercis....