TaxTMI 
TaxTMI 
2026 (3) TMI 1658
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....,240/-) made by A.O out of depreciation on vehicles claimed by the appellant. The disallowance made by A.O and confirmed by Ld. CIT(A) is arbitrary, illegal, baseless and not justified. 2. Ld. CIT(A) erred in remitting back the matter to the A.O relating to disallowance of Rs. 57,154/- on account of charity and donation expenses claimed by the appellant. The disallowance made by AO and is arbitrary, baseless and not justified. 3. Ld. CIT(A) erred in remitting back the matter to the A.O relating to disallowance of Rs. 50,467/- on account of fine & penalty expenses debited in profit & loss account. The disallowance made by A.O and is arbitrary, baseless and not justified. 4. The appellant reserves the right to amend....
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....to 108 of PB. In this case, the findings of Sayaji Iron & Engg Co. Vs CIT (2002) 253 ITR 749 (Guj) were followed. 1.2 Further, it is a settled principle of law that expenses incurred by a company, if otherwise for the purposes of business, cannot be disallowed merely on the presumption of personal use by directors or employees. Even if any personal benefit is derived by a director or employee, the company's business expenditure cannot be disallowed on that ground. 1.3 Motor Vehicles used wholly for business purpose The expenditure in question was incurred wholly and exclusively for the purpose of business. The AO has bought nothing on record to prove that the vehicles were not being used for business purpose. ....
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.... local festivities and community events held in the immediate vicinity of the factory/ plant premises. On perusal of the donation & charity ledger placed at PN 72 of the PB clearly substantiate the claim made above by the appellant. 2.2 Expenditure made solely & exclusively for business purpose The expenditure made towards donation/ charities have been made for smooth day to day functioning of the business and no expenses have been incurred towards performance of any kind of puja. The appellant was approached by the respective Mandir/ Samiti responsible for holding such event and also by the workers working in the plant/ factory of the appellant. Such expenses are incurred by the appellant out of business expediency due to....
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....ge no. 2 para no.5 has alleged that the appellant had not replied to the SCN dt 17.12.2019. Such allegation of the AO is incorrect, the appellant had made a submission on 18.12.2019. The copy of such reply is placed at PN 10 of the PB. 3.2 Applicability of Sec 37(1) On bare reading of provisions of Sec 37(1), Explanation (1), the inference that can be drawn is, only expenditures incurred for infringement of law shall be disallowed. On perusal of the ledger of placed at PN. 73 of PB, the following observations can be made :- i. The expenditure debited mainly comprises of payment towards assessment of Sales Tax, VAT, CST or penalty for late filing of documents with ROC or towards payment of interest. ....
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.... the same time, a part of the submissions of the Ld. Counsel is accepted that the assessee being limited company is subject to several audits and controls and each bill presented is properly vouched at different levels of the internal control and at the same time, log book is also maintained by the assessee. The Ld. Sr. DR failed to bring on record any evidence contrary to the submissions placed on record by the Ld. Counsel for the assessee. The Ld. Sr. DR could not establish that the findings of the A.O was correct and that there was no log book maintained by the assessee. That in absence of any such findings by the Department, in absence of any adverse material on record against the assessee by the Department, the submissions of the Ld. C....