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TMI Blog2022 (8) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... for purpose of business or profession, disallowance of expenses in arbitrary manner on an ad-hoc basis has to be set aside. In the case of ACIT v. Vanesa Cosmetics Adhoc [ 2021 (4) TMI 1191 - ITAT DELHI] additions made by Assessing Officer on account of interest expenses on car having element of personal use, tour and travelling expenses and conveyance expenses respectively, without assigning any reason would not be sustainable in eyes of law. In view of the consistent position taken by various Tribunals on the issue of disallowablility of expenses on purely adhoc basis, without the AO having rejected books of accounts, including the jurisdictional Rajkot ITAT, we are hereby allowing the assessee s appeal in respect of the ad-hoc disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Repairs maint. (motorcar) 88,926/- Telephone charges 1,40,292/- Travelling expense 3,84,615/- 3.1 The AO noticed that the assessee has not maintained log-book or any other document to separate business and non-business expenses. Therefore, it is not established that expenses were wholly and exclusively incurred for the business purposes. Further, the AO noted that many expenses were accounted on the basis of self-made vouchers. In some of the supporting evidences, addresses are of the recipient were missing and vouchers were lacking proper details about the expenditure made. Therefore, the AO disallowed a lump sum amount of 2 lakhs out of the above expenditure by treating it to be incurred for non-business use and adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a purely ad-hoc basis, which is impermissible law. In response, the Ld. DR relied on the observations made by the Ld. CIT(Appeals) in the appeal order. 5. We have heard the rival contentions and perused the material on record. We observe that the AO has not disputed that the accounts and records the assessee are audited under the provisions of section 44AB of the Act. The AO has not rejected the books of the assessee. In the case of Katira Construction Ltd. v. ACIT [2020] 119 taxmann.com 489 (Rajkot - Trib.), ITAT held that where books of account of assessee have not been rejected, onus is on Assessing Officer to point out specific expenses which were not incurred in connection with business and thereafter he can make disallowance under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ground that expenses were in respect of use of vehicles by directors of assessee company was personal in nature. In the case of Kushal Virendra Tandon v. ACIT [2022] 134 taxmann.com 268 (Mumbai - Trib.), the ITAT held that in absence of specific finding by lower authorities regarding documentary evidence which pointed out that expenditure were not incurred wholly and exclusively for purpose of business or profession, disallowance of expenses in arbitrary manner on an ad-hoc basis has to be set aside. In the case of ACIT v. Vanesa Cosmetics Adhoc [2021] 127 taxmann.com 499 (Delhi - Trib.)additions made by Assessing Officer on account of interest expenses on car having element of personal use, tour and travelling expenses and conveyance ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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