TaxTMI 
TaxTMI 
2023 (4) TMI 1156
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....red in law and on facts in confirming the action of Ld. AO in making adhoc disallowances under the following heads and that too without appreciating/considering the submissions of the assessee and in violation of principles of natural justice. * Rs.3,01,2001- on account of salary. * Rs.84,375/- on account of conveyance and car running expenses. * Rs.1,52,394/- on account of general expenses and general expenses & maintenance. * Rs.52,0791- on account of staff welfare. 2. That in any case and in the view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making aggregate disallowance of Rs.5,90,048/- under the various above heads, is bad in law and against the facts and circumstances of the case. 3. Th....
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....in the case of Shri Kailas Chand Agarwal vs. DCIT in operating para 7 to 7.6 held as follows:- 7. We shall now deal with ground number 2 relating to ad-hoc disallowances; 7.1. At the outset, the Ld AR submitted that, Ld AO had in a most arbitrary manner disallowed portion of expense applying ad-hoc percentile and which has been sustained by the Ld CIT(A), despite of the fact that, all these business expenditure debited to profit & loss account [for short "P&L"] and claimed in the return of income has all the valid characteristic laid in section 37(1) of the Act: Sr Head of Expenses Major Business Expenses 1 Vehicle Repairing 73,42,144 2 Office Expenses 32,835 3 Diesel & Lubricants 10,84,337 4 Labour Welfare ....
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....of vouchers requiring denial of allowances with the amount of expenditure and nature of defects therein or therewith, moreover department could not bring out any deprecative material on record to substantiate its conclusion as logical. We couldn't also see remotely there is any mention of rationale in arriving at the percentile of disallowance in the present case, consequently we find substantial force in the claim of the assessee that devoid of any specific infirmity qua the assessee's claim for deduction of the aforementioned expenditure by the lower tax authorities, and for the reason, the ad-hoc disallowance carried out in a most arbitrary manner could by no means be held to be justified. 7.5. Our aforesaid view is fortified by the j....
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....found to have not been incurred by the assessee wholly and exclusively for the purpose of his business. At the same time we observed that the total disallowance made by the assessee on four heads is aggregating to Rs. 5,90,048/- and the assessee under took gross turnover of Rs. 111,31,85,086/- against the claim of certain expenses including said amount of disallowance. 7. As has been held by the coordinate Bench of ITAT Raipur that in para 7.4 of the order that the department could not bring out any depreciative material on record to substantiate to its conclusion as logical. In the present case the assessee has successfully demonstrated that his turnover during relevant financial period was Rs. 111,31,85,086/- and the quantum of disallowa....