No expenditure can be considered excessive merely by comparing it with preceding year’s expenditure:

AO made addition on account of excessive expenses which was deleted by both the lower appellate authorities. On Revenue’s appeal, the Hon’ble High Court observed that AO made the said addition by merely making a comparative study of the expenses for the year under consideration with the preceding the Asst. Year without pointing out as to which of the expenses incurred by the assessee were not connected with the business activity of the assessee or were not admissible in law.It was held that in absence of any specific pin-pointing, AO could not have made the addition merely by comparing expenditure with the preceding year’s expenditure. Revenue’s appeal was dismissed accordingly.

[SYMPHONY COMFORT SYSTEM LTD. - TAX APPEAL NO.1501 of 2011 - GHC]