Section 143(2)

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Vivek (Querist)
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25 October 2012 Dear Sir,
Suppose an assessee who is a lic agent and his business expenses during the FY are as follows -

1. Salary paid to assistant in cash - 48000/-
2. Office rent - 24000/-
3. Refreshment exp. - 14560/-

for the aforesaid expences he has no receipt or bills.
And now in response of notice u/s 143(2), what is remedy to prove these expenses before AO.

Please advise me.

CA. Subhash Dangi

CA. Subhash Dangi (Expert)
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25 October 2012 1. Salary to Assistant: Prepare 12 vouchers on monthly basis with signature of the receiver / office assistant.

2. Office Rent: Produce rental agreement of the office. If residence is being partly used for office purpose, u can substantiate of usage for office with rental agreement of residence. Say 25 to 50% of usage.

3. Refreshment: U can say that refreshment allowance to office boy whenever he visits outside work. Fix some monthly amount and for balance prepare some vouchers as per business transactions.

Vivek

Vivek (Querist)
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25 October 2012 Whether the assessee can claim rent for his own house. If yes, what % of rental value would be allowed

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CA. Subhash Dangi

CA. Subhash Dangi (Expert)
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25 October 2012 If it is own house, it is difficult to establish to IT authority to claim the rent as expenses as you are not paying any rent.

Even determination of proportion of rent and amount also difficult in the absence of Rental agreement

Vivek

Vivek (Querist)
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25 October 2012 Whether the AO will recongnise rent receipts made on plain paper in the absence of rental agreement.