Scrutiny

Dear All,

One of my client's case was selected for scrutiny. The Assessee is an individual earning business income. I have following queries:

1. The Assessee has paid commission to HUF (in which the assessee is the Karta) and duly deducted the TDS. But the AO has disallowed the commission amt. Are there any case laws in which such payments were NOT Disallowed??

2. In the same Assessment year, the Assessee had made a business cum family trip. He debited his business expense of Rs. 8 Lakh to Profit and Loss Account while debited the Drawings Account by Rs. 4 Lakhs for family expenses. This was also substantiated by the travel agent's letter to the AO. But the AO disallowed full 8 Lakhs amount. Can the AO do so? Are there any case laws which can help us during appeal??

Best Wishes,

Kunal Mangal

Ye upar wala kya likh raha hai ???? ye shopping site thode hi hai...

Friend,

1. As far as the commission is concerned, it should be proven that it has been shown as the income of the HUF and the same paid the tax....

Nexus between the sale and the commission paid.. because it is directly related....

It should be supported preferably by an agreement or else the proper invoice would do...

If all these can be proven, then there should be no proble...

2. Travelling expenses of the family members can not be allowed... it should be proven that the project was going on at the time of the travel, hence the same was business expenditure...

and the subsequent sale can be shown to the particular area.....

You can also show some meeting related expenses....

Nexus has to be proven.....

Without the proof of nexus such expense can not be allowed....