154 order

How to respond to order passed with demand u/s 154?

IT department considering Income tax expenses disallowance as It is shown in tax audit as debited to pndl which is wrong disclosure in Tax audit. Actually it is routed through capital but they are disallowing as per tax audit

pls tell how to deal 154?
Replies (5)
Quick Summary
This discussion addresses how to respond to an order under Section 154 of the Income Tax Act concerning disallowances based on tax audit reports. The core issue is when the Income Tax Department disallows expenses shown as debited to the P&L in the tax audit, even though the transaction was actually capitalised. Participants are seeking guidance on how to justify the correct treatment when the auditor's report might be misleading.

Income tax is not allowed as expense. So ITD is right in its disallowance.

Yes but i routed through capital and not debited to pndl so how can i disallow the same

How can auditor report it under P&L acc if not debited to expense?

Capital a/c debited and bank credited
He is proprietor
we have not debited expenses in pndl

Unless auditor rectifies the audit report to the effect, you cannot get justification.

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