Tribunal held that the AO had simply disallowed the expenses simply holding that most of the expenses were incurred in cash and hence had disallowed 10 per cent. out of various expenses. He had nowhere pointed out any specific discrepancy in the books of account nor had he rejected the accounts. The AO could not make ad hoc disallowance. (AY. 2014-15)
Indian Coating and Laminating Corporation v. DCIT (2019) 76 ITR 320 (Luck.)(Trib.)
S. 37(1) : Business expenditure–Method of accounting-Ad-hoc disallowances of general expenses without rejecting the books of account- No disallowances can be made.[S. 145]