The AO had disallowed employee benefit expenses as no business activity was carried out by the assessee. The Tribunal after considering the business of the assessee and various details submitted such as the financials, business model and business history, considered the expenses to be incurred out of commercial expediency. Thus, the Tribunal deleted the disallowance. (AY. 2015-16)
Agencies Rajasthan P. Ltd. v. ITO (2019)73 ITR 633 / 179 ITD 90(Jaipur) (Trib.)
S. 37(1) : Business expenditure – Disallowance of part of employee benefit expenses is held to be not justified.