2024 (11) TMI 317

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....iled its return of income for Assessment Year 2018-19 declaring total income at Rs. Nil. The case was selected for complete scrutiny under e-assessment scheme 2019 to verify the issue of business loss and business expenses. Accordingly, notices u/s 143 (2) and 142(1) of the Income-tax Act, 1961 (for short 'the Act') were issued and served on the assessee. During assessment proceedings, the Assessing Officer observed from the profit & loss account of the assessee that assessee has claimed personal expenses of Rs. 2,72,21,201/- in connection with business. He observed that assessee had not produced any relevant details in support of the personal expenses incurred by it. In absence of the above details of personal expenses, the Assessing Offic....

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....at, the Ld. CIT(Appeals) miserably failed to consider the fact that the expenses claimed by the Appellant under of head of "personnel expenses" as mentioned in the audited financials of Appellant are directly related to the business and hence cannot be disallowed U/S 37 of the Act. 3. That, the CIT (Appeals) erred in law by confirming an ad-hoc disallowance of personnel expenditure at the rate of 10% as estimated by the Ld. AO u/s 37 of the Act which is illegal, arbitrary, and hence liable to be deleted. 4. That, the Ld. CIT (Appeals) erred in law and on facts by confirming the disallowance of personnel expenditure without a query being raised about the same by the Ld. AO making the disallowance unsustainable in law. 5. That the ld. C....