The Tax Publishers2021 TaxPub(DT) 0918 (Karn-HC)

INCOME TAX ACT, 1961

Section 37(1)

When the books of account had been accepted but not rejected by pointing to any defects therein and the entire expenditure was supported by documentary evidence on the facts and circumstances of the case, disallowance made of expenses being 10% of the expenses paid to port workers as incentives was required to be deleted.

Business expenditure - Allowability - Payment of speed money to workers for speedy completion of their work -

Assessee filed appeal against the order of Tribunal in sustaining the disallowance of expenses, being 10% of the expenses paid to port workers as incentives even when the books of account had been accepted but not rejected by pointing to any defects therein and the entire expenditure was supported by documentary evidence on the facts and circumstances of the case. Held: In the absence of any challenge to the entries made in the books of account by the authorities, the finding recorded by the AO as well as the Tribunal that it denied the claim of the assessee for expenditure to the extent of 10% on account of payment of speed money, was perverse as the same was duly supported by the documentary evidence. Hence, disallowance made of expenses, being 10% of the expenses paid to port workers as incentives, was required to be deleted.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2007-08 to 2009-10



IN THE KARNATAKA HIGH COURT

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