Disallowance on account of expenditure

Department contended that transactions of amount to Rs.1,9633,929 were made in cash in respect of expenses, which had been disallowed but First Appellate Authority without any justification had restricted disallowance to Rs.816,956

Taxpayer contended that all the amounts paid were below the threshold limit of Rs.10,000 but these amounts were paid through single voucher; and admittedly the payments made were below the threshold of taxable limit which fulfilled the conditions laid down by law; that Taxation Officer had not denied that these expenses related to the business purposes; and that instead of deleting the addition, First Appellate Authority had only restricted the addition at 50% of the claim

Validity

Taxation Officer had nowhere observed that expenses claimed were not related to the business purposes

Most of the expenses were below taxable limit and paid for the purpose of factory petty cash electricity account etc.

Taxation Officer had failed to confront the taxpayer specifically regarding the claim of the amount exceeding the taxable limit

First Appellate Authority had rightly restricted the disallowance to the 50% of the claim

Order of First Appellate Authority was not interfered by Appellate Tribunal.