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| The Tax Publishers2019 TaxPub(DT) 7531 (Mum-Trib) INCOME TAX ACT, 1961
Section 143(3)
Disallowance of certain percentage of salary on the pretext that profit of 0.37% on HR Services rendered by assessee-company was very low amounted to ad hoc disallowance, which could not be sustained at all.
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Assessment - Ad hoc disallowance - Disallowance of 30% of salary expenses on the basis of conjectures and surmises -
Assessee claimed deduction of salary expenses. AO disallowed 30% thereof.CIT(A) confirmed 10% disallowance on the pretext that profit of 0.37% on HR Services rendered by assessee-company was very low'.Held: Both AO as well as CIT(A) had on the basis of presumption made ad hoc disallowance, which could not be sustained at all.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 37(1)
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