Consistency in tax treatment of company expenses prevents ad hoc disallowance for presumed personal use of cars and telephones.

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....HC held that consistency in tax treatment required deletion of the ad hoc disallowance of telephone and car expenses where similar disallowances for earlier years had already been deleted and no material change in facts was shown. It further held that a company's expenditure cannot be treated as personal expenditure merely because employees or directors may use cars or telephones authorised by the company; disallowance is justified only on a finding that the has no nexus with business. The Court found the AO's reasoning cursory and ruled that the company was not required to maintain a log book or split journeys into personal and official use. The disallowance was set aside.....