09 December 2010
I am seeking help on the following question:
If the disallowance is made by the AO on the grounds that the assessee was not able to establish that the expenditure is entirely for business, can it be said that the disaalowance is ad hoc?
10 December 2010
If he assessing officer has provided sufficient opportunities and he assssee could no support his claim by satisfactory evidence, he assessing Officer is within his rights to disallow such expenditure. He cannot, a the same time, make an adhoc disallowance, which mans ha he impliedly concedes that some expenditure is possible on he nature of income. He should povide justifying reasons for his disallowance and no merely say hat no details were furnished. Such additions would be wiped out on appeal invariably.