Rent Paid In Cash Can’t Be Allowed As Business Expenses

Rent paid in cash can’t be allowed as business expenses without details
Shri Santilal B. Parekh vs. ITAT Mumbai
case no. – 4262/mum/2017 date -4.02.2019

Fact of the Case

  1. In the present case the assessee is a person who is engaged in business.
  2. The assessee claimed deduction of Rs.54000 p.m as rent expenses of his business. But the A.O denied to allow the deduction.
  3. The assessee then appealed to the ITAT against the decision of A.O

Decision of the Case

The Income Tax Appellate Tribunal observed the
  1. The assess paid rent in cash.
  2. The rent paid in cash of Rs.54000 p.m without any proper supporting document in respect of rent payment i.e no lease rent agreement.
  3. Even there is no proper evidence that the premise has been used wholly for the running of the said business.
  4. Only the assessee has submitted selfsupporting vouchers with respect to the payment of rent in cash.
  5. Under this situation, the amount of rent paid in cash cannot be allowed as business expenses.