Ad hoc disallowance of business expenses restricted to 10% where full addition lacked adequate justification.

Business expense claims, including diesel and petrol expenses, were disallowed for lack of proper substantiation, but the Tribunal found the Assessing Officer had not justified a full ad hoc addition on the record. The disallowance was therefore curtailed to a reasonable percentage of the expenses claimed, and restricted to 10%, giving the assessee partial relief.

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Issues: Whether the ad hoc disallowance of business expenses and diesel and petrol expenses required to be sustained in full or curtailed.

Analysis: The assessee's expenditure claims were disallowed by the Assessing Officer for want of proper substantiation and the first appellate authority affirmed the additions. The Tribunal found that the Assessing Officer had not furnished adequate justification for the disallowance and, on the available record, considered that the disallowance should be restricted to a reasonable percentage of the expenses claimed.

Conclusion: The disallowance was restricted to 10% of the expenses claimed, and the assessee succeeded partly.

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