Business expense in case of proprietorship
This query is : Resolved
16 February 2016
Sir,
1) I wanted to ask whether Assessing officer can disallow whole of depreciation expense, insurance expense & repair and maintenance expense citing personal use, in case where assessee (sole proprietor) bought vehicle which is in his name and not proprietor, but the same was used partly for business purpose and partly personal.
2) Also, assessee being a dealer/distributor in trading of Hindustan Petroleum Cylinders and block of vehicles also include some commercial vehicles which cannot be used for personal purpose. Can, A.O disallow above mentioned expenses in case of commercial vehicles (delivery trucks).
1) I wanted to ask whether Assessing officer can disallow whole of depreciation expense, insurance expense & repair and maintenance expense citing personal use, in case where assessee (sole proprietor) bought vehicle which is in his name and not proprietor, but the same was used partly for business purpose and partly personal.
2) Also, assessee being a dealer/distributor in trading of Hindustan Petroleum Cylinders and block of vehicles also include some commercial vehicles which cannot be used for personal purpose. Can, A.O disallow above mentioned expenses in case of commercial vehicles (delivery trucks).
16 February 2016
AO has discretion to disallow any expenditure. If you feel AO's action is incorrect or unlawful, file an appeal with CIT(A) against the order issued by the AO.
16 February 2016
sir we are in process of filing an appeal with CIT(A). As, A.O had disallowed whole of expenses which cannot be personal because vehicles also include commercial vehicles tailor made to deliver Cylinders which cannot be used for personal purpose.
17 February 2016
There are ample chances of winning the case at upper levels of adjudication.
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