07 January 2014
1/4th expense disallowed by the A.O.treating exp as of personal nature and levied penalty of concealment of income. is there is any case law on the same subject in favour of assessee?? also what is the name & no. of the section in which A.O.can disallow certain exp considering them to be of personal nature?? plzz reply explaining facts
As per section 37, expenses of personal nature cannot be claimed as an expense.
since the common expenses such as telephone cannot be bifurcated, the officer usually makes an adhoc disallowance of 25-30% as being of personal in nature.
however, you can argue for your case and convince him that there are no expenses of personal nature and that everything is official in nature, and as such the full amount should be allowed
08 January 2014
AO disallowed exp,and client agreed to such disallowance subject to condition that penalty for concealment should not be imposed on it. but AO later made scn u/s 271(1)(c).
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