TMI Blog2017 (12) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... nses and the same was never doubted by the Assessing Officer at any point of time. CIT(A) rightly held that the Assessing Officer made estimated disallowances because of some expenses which had gone up, however, the Assessing Officer had not brought on record a single instance of expenses not being vouched properly or any of these expense being artificially inflated or being of a bogus nature, the CIT(A) further held that there was no allegation that the expenditure occurred out of any other activity and Assessing Officer did not bring on record any instance of the expenditure being used for purposes of the other business. The addition made by the AO was rightly deleted by the CIT(A) - Decided against revenue - I.T.A .No. 1768/DEL/2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- in the previous year to ₹ 26,01,09,470/- in this year, but the net profit had come down from ₹ 2,52,05,645/-. Thus, the Assessing Officer observed that even while the turnover has gone up the profit had declined and the decreasing profit was mainly due to abnormal increase in two expenses i.e. the profit monitoring expenses which has gone from ₹ 31,65,768/- to ₹ 84,21,250/- and Erection and Commissioning charges which has gone up from ₹ 4,65,768/- to ₹ 66,10,810/- and the net profit had decrease due to substantial increase in these expenses. The assessee was asked to justify this abnormal increase in two expenses. Thus, the assessee submitted that most of the project were in this year was carried in di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed the expenses to the extent of 50%, as to increase business no one will get a less profit. Thus, the Ld. DR submitted that the CIT(A) failed to see this aspect and the order may be set aside. 6. We have heard both the parties and perused the material available on record. Despite sending the notice no one has appeared for the hearing. We have perused all the records and gone through the order of the CIT(A) wherein the CIT(A) has rightly deleted the addition as the Assessing Officer made the estimated addition or ad-hoc addition without assigning any reason to that effect. Merely, on the basis of surmises, the Assessing Officer cannot make an addition when the assessee has given all the details about the expenses and the same was neve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance only on account of the fact that an expenditure may have increased in comparison to the previous year is not justified. In the circumstances there does not appear to be any reason to make the disallowance of expenditure without bringing specific material on record to justify the disallowance. Thus, the addition has been made in a routine manner and on an adhoc basis. The Hon ble ITAT in the following decisions has held that adhoc disallowances cannot be made i. M/S. Ganesh Foundry vs. ACIT 78 TTJ It was held that disallowance made without pinpointing out any item of disallowable nature cannot be sustained. ii. ACIT vs. Govind Ram Kakwani 90 TTJ (Jabalpur) 1981 It was held that any adhoc disallowance m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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