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| The Tax Publishers2019 TaxPub(DT) 0272 (Guj-HC) INCOME TAX ACT, 1961
Section 37(1)
Where AO did not point out defect in details of expenditure submitted by assessee and personal elements in said expenditures were taken care in FBT, expenditure was to be allowed under section 37(1).
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Business expenditure - Addition on account of unexplained and unverifiable expenses - Allowability -
Assessee was engaged in offering BPO services to various clients. AO made addition of certain expenses as unexplained and unverifiable expenses under section 37(1). However, CIT(A) directed to delete the addition by observing that AO had not pointed out any specific defect in the details of such expenditure furnished by the assessee. All expenditures were billed and properly vouched and appropriate deduction of TDS was also made. Assessee was subjected to fringe benefit tax also. Tribunal had upheld the order of CIT(A). Held: Revenue was not in a position to satisfy how finding recorded by CIT(A) confirmed by Tribunal while deleting the disallowance made by AO as unexplained and unverifiable expenses could be said to be perverse. Therefore, it could not be said that Tribunal and CIT(A) have committed any error in deleting the aforesaid disallowance.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE GUJARAT HIGH COURT
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