Without pointing to defect in the vouchers, ad hoc disallowance of 10% cannot be made: ITAT Delhi

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Without pointing to defect in the vouchers, ad hoc disallowance of 10% cannot be made: ITAT Delhi

TPF Getinsa Euroestudios S.L. Versus ACIT

Case No.: ITA No. 2400/Del/2022

Facts:

1. During the course of assessment proceedings, the AO raised queries with respect to details of various expenses.

2. The assessee had duly furnished the ledger account of all the expenses and sample copies of invoices and vouchers during the course of assessment proceedings.

3. During the course of the assessment proceedings, no specific query was raised by AO to furnish further vouchers.

4. The AO disallowed 10% of the expenses on an ad hoc basis.

ITAT Delhi held as follows:

1. In case of companies, which are having large volume of transactions, it would be practically difficult to bring all the evidences in one go. Hence the ledger account copies are furnished to the tax authorities and normally they are verified on a test check basis.

2. Without pointing out specific defects in the documents furnished by the assessee, disallowance made on the ground that the assessee failed to furnish all the documentary evidence is not acceptable.

3. Hence, keeping in view the facts of the case and the judgments, the appeal of the assessee on this ground is allowed.

The copy of the order is as under:

1681896523-2400 TPF Getinsa Eurostudios S.L