Sunita Devi Ahluwalia vs. DCIT, Circle 60 (1)

Parties Involved

Facts Summary

The assessee, Sunita Devi Ahluwalia, filed her return of income declaring income at Rs.1,27,62,190/- for the Assessment Year 2013-14. The case was selected for scrutiny, and notices were issued under sections 143(2) and 142(1) of the Income-tax Act, 1961. During the assessment proceedings, the Assessing Officer disallowed certain expenditures claimed by the assessee, including legal expenses of Rs.15,00,000/-, salary expenses of Rs.13,75,471/- paid to her children, travelling expenses of Rs.7,04,961/- for her children, and personal travelling expenses of Rs.2,14,450/-. Additionally, 20% of the depreciation on vehicle expenditure was disallowed as personal expenditure. The assessee appealed against these disallowances before the Commissioner of Income-tax (Appeals), who sustained most of the disallowances. Aggrieved by this order, the assessee filed an appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the legal expenses of Rs.15,00,000/- incurred to protect the existing tenancy rights are allowable.
• 2. Whether the salary expenses of Rs.13,75,471/- paid to the assessee's children are allowable.
• 3. Whether the travelling expenses of Rs.7,04,961/- for the assessee's children are allowable.
• 4. Whether the travelling expenses of Rs.2,14,450/- incurred by the assessee are allowable.
• 5. Whether the 20% disallowance of car depreciation, insurance, and telephone expenses as personal in nature is justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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