2022 (1) TMI 643

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....essment Year 2012-13. 2. In the grounds of appeal, the assessee has challenged the adhoc disallowance of Rs. 10,00,000/- made towards expenses debited on account of; travelling and conveyance; and miscellaneous expenses. 3. The assessee is engaged in the business of investment in securities and lending of money. It has shown income from rent at Rs. 1,74,85,640/-; consultancy charges of Rs. 3,40,000/-; interest income of Rs. 6,27,526/-; miscellaneous income of Rs. 98,738/-; and dividend income of Rs. 8,400/-. 4. The assessee has debited an amount of Rs. 67,42,559/- under the head employee benefit expenses and other expenses. Out of the said amount the assessee had suo moto disallowed Rs. 44,57,411/- as per the following details:- ....

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....Officer held that no vouchers have been produced for verification and the purpose for the visit in travelling account and other misc. expenses. Accordingly, he proceeded to make ad-hoc addition of Rs. 10,00,000/-. 7. The ld. CIT (Appeals) has confirmed the disallowance. The relevant observations of the ld. CIT (Appeals) are as under:- "5.1 The assessee has filed the ledger account of travelling and conveyance, showing expenditure of Rs. 7,99,769/-, and the ledger account of boarding and lodging expenditure of Rs. 2,96,741/-. It is submitted that most of the travel expenses related to visits made to Kolkata and Mumbai for consultations with Khaitan and Co., Solicitors and Advocates, in relation to litigation in respect of propert....

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....that it had to incur certain expenses to maintain its corporate identity. Those cases are clearly distinguishable as the question in this case is whether the expenses claimed had anything to do with the operation of the company at all. After careful consideration, the grounds of appeal nos. 1 and 2 are dismissed. " 8. We have heard both the parties and perused the relevant material referred to before us. In so far as the expenditure incurred on travelling and conveyance is concerned, the ld. Counsel has submitted that assessee has incurred most of the expenditure on domestic visit to Kolkata and Mumbai for consultations with 'Khaitan and Co., Solicitors and Advocates', who were handling the litigation of the appellant. In so far as the f....