2019 (2) TMI 272

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....ad in law as well as on facts in upholding the disallowance in respect of Cars and Telephones used by the staff members of the assessee firm under section 38 (2) of the Income Tax Act, 1961 by the learned assessing officer (AO) 3. That the assessee craves the right to add, alter, amend or withdraw any ground(s) of appeal. 2. At the time of hearing, an adjournment application was moved on behalf of the assessee. The appeal was passed over. In the second round also, no one was present on behalf of the assessee. On considering the material available on record, it was deemed appropriate to proceed with the present appeal ex-parte qua the assessee appellant on merit after hearing ld. Sr.DR. 3. The relevant facts of the case are that the asse....

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....g with copies of ledger accounts and photocopies of relevant b ills exceeding Rs. 20000/- Telephone expenses : In this respect we are enclosing herewith month-wise and unit-wise details of expenses along with details of expenses exceeding Rs, 5000/-." 5.3 The reply furnished by the assessee has been considered and found untenable. No log book and telephone register have been maintained by the assessee. Therefore, use of car and telephone for other than business purposes cannot be ruled out. Section 38(2) of the Income Tax Act, 1961 provides that:- " Where any building, machinery, plant or furniture is not exclusively used for the purposes of the business or profession, the deductions under sub-clause (ii) of clause (a) and clause ....