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2022 (4) TMI 580 - AT - Income TaxDisallowance of certain expenses on an ad-hoc basis - Whether AO failed to point out any basis which could justify the respective disallowance so made by him? - HELD THAT:- Disallowance of certain expenses on an ad-hoc basis by the Assessing Officer is merely backed by general observations and not on the basis of any material which would support the same. Admittedly, an assessee remains under a statutory obligation to substantiate that his claim for deduction of expenses falls within the four corners of Sec. 37(1) On a perusal of the assessment order, we find that there is no whisper as regards any such material and/or basis which would justify the disallowance of the expenses so carried out by the A.O - ad-hoc disallowance of expenses by the A.O is not backed by any supporting material but is merely guided by general observations on his part. We are unable to comprehend as to on what basis part of the expenses had been disallowed by the A.O, while for the remaining part has been allowed. Apart from that, we find there is no whisper in the body of the assessment order about any such specific expenses which as per the AO could not be verified, or, were not supported by bills or vouchers. In our considered view, such disallowance of expenses on an ad-hoc basis, i.e, de hors any supporting material can by no means be permitted. We find substantial force in the claim of the ld. A.R that devoid of any specific infirmity qua the assessee’s claim for deduction of the aforesaid expenditure by the lower authorities, the disallowance of a part of the same in a most arbitrary and a whimsical manner, i.e, on an ad- hoc basis could by no means be held to be justified. We are unable to concur with the disallowance of the expenses in question on an ad hoc basis by the A.O. We, thus, not finding favor with the view taken by the lower authorities set-aside the order of the CIT(A), and vacate the disallowance - Decided in favour of assessee
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