Loading judgment…
Facts
The assessee filed an appeal against the order of the CIT(A) for AY 2022-2023. The Assessing Officer (AO) disallowed 50% of the total expenditure of Rs. 3,58,22,629/- without specifying which expenses were disallowed. The assessee contended that such ad hoc disallowances are not permissible under the Income Tax Act.
Held
The Tribunal noted that the disallowance was an ad hoc disallowance without pointing out specific faults in claimed expenses. The Tribunal held that ad hoc disallowances are not permissible and, in the absence of specific disallowance, the ad hoc disallowance of 50% of expenses is liable to be deleted.
Key Issues
Whether an ad hoc disallowance of expenditure made by the AO without specifying the nature of expenses is permissible under the Income Tax Act.
Sections Cited
Income Tax Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the Ld.CIT(A), National Faceless Appeal Centre(NFAC), Delhi order dated 01/01/2025 passed in Appeal No. NFAC/2021-222/10327663 for the assessment year 2022-2023.
It was submitted by the learned AR that the AO in the course of assessment has disallowed 50 percentage of the total expenditure of Rs.3,58,,22,629/-. It was the submission that the AO has not even specified which are the expenses which is being disallowed. It was the submission that ad hoc disallowances is not permissible under the Income Tax Act. It was a prayer that the disallowance may be deleted.