Kolkata bench of Income Tax Appellate Tribunal recently allowed 75 percent deduction in respect of business promotion expenditure comprising credit card payments and club expenses since there was no evidence in the hands of the assessee to prove that the same was incurred for business purpose.
In the present case assessee, an individual engaged in the business of running guest house in the name of his proprietary concern. During the assessment year he filed his return of income claiming business promotion expenditure comprising credit card payments and club expenses. However, the AO rejected the claim in the absence of any documentary evidence to prove that the same was incurred in relation to the business.
The bench noted that the first appellate authority given relief to the assessee after considering the nature of business of the assessee which warrants the incurring of expenditure on business promotion. Upholding the order, the bench observed that it would be fair and reasonable to allow the expenses claimed by the assessee on business promotion to the extent of 75% and disallow the balance 25%. Accordingly the disallowance made by the A.O. on account of business promotion expenditure to the extent of 25%.
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