TaxTMI 
TaxTMI 
2012 (10) TMI 757
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....r and the disallowance/ 2. addition so made are unjust, unwarranted, unlawful and devoid of any supporting material on record:- Vehicle running & maintenance Exps. (14,860+17,000/-) Rs. 31.960/- Travelling & conveyance exps. Rs. 7,500/- Telephone Exps. Rs. 8,111/- House hold exps. Rs. 36,000/- Various Exps. Rs. 55,185/- Rs.138,756/- 3. That the authorities below have erred in law as well as on the facts of the case by rejecting the submissions made by the assessee and the same has not been considered by the authorities below in right prospective and /the conclusions drawn by the authorities below are arbitrary, illegal, hypothetical and devoid of any supporting material on record and therefore the addi....
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....O noticed that these expenses included rickshaw charges and cost of gas cylinders amounting to Rs.8,590/- beside Rs.30,000/- on account of running of car. To a query by the AO, seeking production of log book of the car, the assessee submitted that no log book was maintained nor the assessee claimed that she or her family members owned separate car for personal purposes. In these circumstances, the AO disallowed 1/4th of the expenses amounting to Rs.7,500/- for personal use of car beside disallowance of 25% of depreciation on car, resulting in addition of Rs.18,694 [7500+11,194]. 3.3.Likewise,the AO disallowed 25% of the expenditure on personal use of phones installed at the residence and shop in the name of Manoj Gupta and Kamna Traders ....
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....65,870/- g) Deepawali expenses Rs.5,230/- Rs.1,81,470/- 3.51 Since the assessee produced evidence with regard to advertisement expenses for Rs.65611/- & diwali expenses were reasonable while out of remaining expenses of Rs.1,10,370/-, bills for an amount of Rs.5,780/- alone were produced, considering the fact that net profit was only 10.29% in the year under consideration as against 30.19% in the preceding year, the AO disallowed 50% of the expenses of Rs.1,10,370/-, being not supported by bills and vouchers, resulting in disallowance of Rs.55,185/-. 4. On appeal, the ld. CIT(A) dealt with the aforesaid disallowances in the following terms:- " A. Vehicle running and maintenance 4.I.2 I have considered the subm....
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....1/4th of the telephone expenses were disallowed by the Assessing Officer on the ground that phones for personal purposes cannot be ruled out. 4.4.1 The appellant was asked to file the working in this regard on the basis of which the entire telephone expenses were claimed. No working has been submitted and the entire expenses of all the three telephone installed at the residence and the shops along with the mobile phone has been claimed. The appellant has to work out the basis to claim such expenses, may be on estimate basis also. In the absence of such working, the addition is sustained as being not exclusively for the purposes of the appellant. (E) Household expenses(Rs.36000) 4.5 The addition of Rs.36,000/- was made by the Assess....
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....expenses under different heads and after due opportunity to the appellant to explain the same, disallowed the amount of Rs.55,185/- on a fair and reasonable basis in the absence of proper details. The basis and addition by the AO appears to be reasonable and the addition of Rs.55,185/- is confirmed." 5. The assessee is now in appeal before us against the aforesaid findings of the ld. CIT(A),upholding various disallowances .The ld. AR on behalf of the assessee while carrying us through the impugned order contended that the ld. CIT(A) was not justified in upholding the disallowances without rejecting the books of account. In this connection, the ld. AR relied upon the decision of Hon'ble Apex Court in State of Orissa Vs. Maharaja Shri V.P.....
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....deny before us that expenditure on Deck and fittings of speaker and Air Conditioners in car is capital in nature. Moreover, since personal use of cars and telephones by the assessee and her family members or staff has not been denied nor it was claimed that the assessee or her family members had any independent vehicles or telephones for personal use, in our opinion disallowance of 1/4th of the expenses on running and maintenance of vehicles as also expenses on telephones/mobiles, in the light of provisions of sec. 38(2) of the Act, is reasonable. Moreover, since the est imate of expenditure of Rs. 5,000/- pm towards house hold expenses has been made by the AO, considering status of the assessee and totality of facts and circumstances and t....