TMI Blog2021 (1) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... nning are also disallowed to the extent of 20% for personal purpose. The assessee has not disputed the fact that the proper bills and vouchers were not produced by the assessee for verification therefore to that extent the assessee has failed to prove that all the expenses were incurred wholly and excessively for business purpose. The onus to prove the claim of expenditure incurred wholly and excessively for business purpose lies on the assessee. Accordingly, there is a default on the part of the assessee to substantiate the claim of the expenditure. However, the disallowance of 20% made by the AO is arbitrary and excessive. As relying on M/S. RIMJHIM ISPAT LIMITED [ 2016 (1) TMI 374 - ALLAHABAD HIGH COURT] ad hoc disallowance made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny view of the matter the interest charged under different section is highly unjustified. 5-That in any view of the matter the appellant reserves his right to take fresh grounds of appeal before hearing of appeal. 2. The only issue arises in the appeal of the assessee is regarding the ad hoc disallowances @20% made by the AO in respect of some expenses for want of proper bills and vouchers as well as the telephone and vehicle expenses on the ground of personal use. 3. The learned AR of the assessee has submitted that the Assessing Officer has made ad hoc disallowances in respect of certain expenses without pointing out any specific defect or the profit declared by the assessee is less than the past history. He has further submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oved by the production of bills and vouchers. In the absence of bills and vouchers, the AO was justified in disallowing a certain portion of such expenses. 5. I have considered the rival submissions as well as relevant material on record. The Assessing Officer has made an ad hoc disallowance of 20% of certain expenses as under:- The assessee is dealer of gold and silver ornaments. Assessee failed to produce vouchers/bills in respect of expenses debited in P/L Account, without expenditure the business cannot be run but the assessee should produce vouchers. In this regard vide order sheet entry dated 19.03.2015 the assessee was asked why 20% of expenses debited in P/L Account in respect of advertisement, misc. expenses, repair and mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore to that extent the assessee has failed to prove that all the expenses were incurred wholly and excessively for business purpose. The onus to prove the claim of expenditure incurred wholly and excessively for business purpose lies on the assessee. Accordingly, there is a default on the part of the assessee to substantiate the claim of the expenditure. However, the disallowance of 20% made by the AO is arbitrary and excessive. The Hon'ble jurisdictional High Court in the case of Pr. CIT vs. Rimjhim Ispat Limited (Supra) as relied upon by the learned DR has held in para 7 and 8 as under:- 7. Having heard the learned counsel for the parties, we find that there is an 7 express finding given by the assessing authority as well as by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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