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2014 (1) TMI 652 - AT - Income TaxAddition on ad hoc basis - Cash payment made to various truck/tempo operators – Compliance of provisions of section 194C of the Act – Deduction of TDS – Held that:- The Assessing Officer made addition of 25% of the claim and in the first appeal, the Commissioner of Income Tax(A) restricted the disallowance to 10% of expenses being made in cash by the assessee but these ad hoc disallowances are based on surmises and conjectures - the ad hoc disallowance and addition cannot be made on the basis of hyper technical approach or imaginary observation - The Assessing Officer is bound to bring some element or material to substantiate the fact that the assessee has inflated its expenditure or there was some element of personal use pertaining to the amount claimed by the assessee as expenses. The addition made by the Assessing Officer and partly confirmed by the CIT (A) is not sustainable – there is no valid reason to make ad hoc disallowance and addition only on the basis of imaginary allegation without substantiating the fact that there was some element of inflated claim or personal use by the assessee – Decided in favour of Assessee.
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