Date of Hearing: 05.12.2023
Date of Pronouncement: 13.02.2023
PER CHANDRA MOHAN GARG, J.M.
This appeal filed by the assessee is directed against the order dated 24.06.2019 of the Ld. CIT(A)-12, New Delhi relating to Assessment Year 2016-17.
The grounds of appeal raised by the assessee cite errors in law and facts in confirming the action of the AO in making adhoc disallowances under several heads without considering the submissions of the assessee and in violation of principles of natural justice:
The total disallowance confirmed was Rs.590,048. The appellant’s counsel referenced a prior ITAT Raipur Bench ruling, arguing similar grounds where the ITAT overturned similar disallowances due to lack of evidentiary support from the revenue.
The hearing led to an extensive review of the ad-hoc disallowance approach, focusing on the absence of specific objections or evidence against the claimed expenses. The tribunal found no substantial evidence presented by the AO or CIT(A) to justify the disallowances and noted the arbitrary nature of the deductions.
The Tribunal cited the High Court of Madras judgment in V.C. Arunai Vadivelan Vs ACIT, emphasizing the need for specific reasons for disallowance which were not provided in this case. Consequently, all ad-hoc disallowances were vacated, and the appeal was allowed in favor of the assessee.
The decision underscores the necessity for tax authorities to base disallowances on clear, concrete evidence rather than presumptions or arbitrary assessments.
Order pronounced in the open court on the date mentioned above.
Shamim Yahya, Accountant Member
Chandra Mohan Garg, Judicial Member
Challenge Against Adhoc Disallowances: Shashi Kant Loyalka vs ACIT Circle-35(1) for AY 2016-17
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform