2026 (7) TMI 964

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....hoc disallowance of Rs. 10,04,092/-. 2. Briefly, the facts of the case are that the assessee filed its return of income declaring total income of Rs. 1,30,60,570/-, which was selected for scrutiny. During the course of assessment proceedings, the Assessing Officer issued show cause in terms of admissibility of expenses claimed in the profit &loss account amounting to Rs. 3,46,46,477/-. In response, the assessee filed its submissions which were considered but not found acceptable. As per the Assessing Officer, in absence of proper bills/vouchers and foolproof vouchers for the entire expenses claimed, 5% of the expenses claimed of Rs. 3,46,46,477/-, which works out to Rs. 17,32,320/- needs to be disallowed and which were brought to tax in ....

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....hich has been claimed by the assessee during the year under consideration. It was submitted that no defect has been pointed out in the books of accounts or for that matter, books of accounts have not been held to be non-reliable. It was further submitted that the 12 head of expenses, wherein, the addition has been sustained consisted primarily of loss on foreign exchange transaction, clearing and forwarding expenses, travelling expenses, labour charges, repair and maintenance of machinery. It was submitted that as far as the foreign exchange loss is concerned, the same is clearly a non-cash notional loss arising from restatement of foreign currency liabilities as per Accounting Standard (AS-11) and therefore, there cannot be any dispute in ....

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....d without pointing out any specific defect in the books of accounts and it is a settled position that the ad-hoc disallowances cannot be sustained and reliance was placed on various Coordinate Benches of the Tribunal and it was submitted that the disallowance so sustained be directed to be deleted. 6. The ld. DR has been heard, who has relied on the findings of the Assessing Officer. It was submitted that the ld. CIT(A) has already allowed partial relief to the assessee and the order of the ld. CIT(A) be confirmed. 7. We have heard the rival contentions and perused the material available on record. Where the Assessing officer has accepted 95% of expenses, it in effect means that there is no dispute on the genuineness of the expenses s....