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Judgment
PER AMITABH SHUKLA, AM,
This appeal filed by the assessee is against order dated 10.09.2025 of the Learned Commissioner of Income Tax(Appeals)-29, New Delhi, [hereinafter referred to as ‘ld. CIT(A)] arising out of assessment order dated 26.11.2019 passed u/s 143(3) of the Income Tax Act, 1961 pertaining to Assessment Year 2017-18. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has raised following grounds of appeal:-
1.That the order passed by the Hon'ble CIT(A) dated 10.09.2025 is against law and facts of the case.
2.That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the impugned assessment order u/s 143(3) of the Income Tax Act, 1961 and without complying with the mandatory conditions as envisaged under the Income Tax Act 1961.
3.That having regard to .the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an ad-hoc disallowance of Rs. 1,50,000/- for Conveyance Expenditure of Assessee without considering the facts of the case and without considering the submissions of Assessee and without observing the principles of natural justice.
4.That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an ad-hoc disallowance of Rs. 2,50,000/- for Printing and Stationary Expenses of Assessee without considering the facts of the case and without considering the submissions of Assessee and without observing the principles of natural justice.
5.That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making a n ad-hoc disallowance of Rs. 2,00,000/- for Repair and Maintenance Expenses of Assessee without considering the facts of the case and without considering the submissions of Assessee and without observing the principles of natural justice.
6.That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an ad-hoc disallowance of Rs. 2,00,000/- for Sales Promotion Expenses of Assessee without considering the facts of the case and without considering the submissions of Assessee and without observing the principles of natural justice.
7.That in any case and in any view of the matter the additions made by the Ld. AO in the assessment order are not sustainable on law and on facts and on many factual and legal grounds and therefore, Ld. CIT(A) erred in neither quashing the illegal Assessment order nor deleting the illegal additions made in the Assessment Order in toto and therefore, both the orders i.e., the order passed by the Ld. AO and the order passed by the Ld. CIT(A) are liable to be set aside.
8.That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of the Ld. AO in charging interest u/s 234B, 234C & 234D of the Income Tax Act, 1961.
The appellant assessee through the above mentioned grounds of appeals is contesting ad-hoc disallowance of Rs.1,50,000/- for conveyance expenditure, of Rs.2,50,000/- of printing and stationary expenses, of Rs.2 lakhs for repair and maintenance expenses and of Rs.2 lakhs for sales promotion expenses. As per the brief factual matrix of the case noted from the order of the ld. AO, the impugned ad-hoc additions by way of disallowances, were made on the premise of deficient compliance. The ld. First Appellate Authority concurred with the findings of the ld. Assessing Officer.
We have heard rival submissions in the light of material placed on record. The ld. Counsel for the assessee vehemently argued that the impugned disallowances were purely based upon conjectures and guess work. It was argued that the case of the assessee is covered by the decision of this Tribunal in the case of Spectrum Talent Management in ITA NO.4000/Del/20025 dated 12.11.2025, wherein, on nearly identical facts, it was concluded that such ad-hoc disallowances do not survive.
The ld. DR placed reliance upon the orders of the lower authorities.
We have noted that this Tribunal in the case of Spectrum Talent Management(supra) have observed as under:-
“…6. Thought ld. DR defends the impugned additions alleging that same are disproportionate and not befitting nature of business, we find that the A.O as well as the CIT(A) has not pointed out any discrepancies in the books of accounts duly audited under the Tax audit as required under the provisions of section 44AB of the Act. The AO has not recorded any cogent reasons for making the ad-hoc disallowance of travelling & telephone expenses. The appellant has relied on the judgments of various courts to contend that the adhoc disallowances are not sustainable. His specific reliance was on in the case of ACIT vs. Vanesa Cosmetics [2021] taxmann.com 499 (Delhi-Trib.) which is also followed by Rajkot bench in M/s. Mokshstar International v. The ACIT ITA No. 397/Rjt/2017 order dated 27-07-2022, to hold that without disturbing books ad-hoc disallowances of such expenses, which may have some personal, component is not justified.
7.We are also of same view, that expenses like travelling, hospitality or telephone use will always have some personal component but to disallow any part of same there should be specific enquiry and cogent evidence establishing that from very inception the expenditure was intended to be for benefit or on account of any person other than assessee, and same had no bearing on business activity of assesse. Specially, the nature of business should be examined to allege that such expenditure has no bearing on business activity of assesse. Thus we allow these ground no. 1 and 2. Impugned disallowances are directed to be deleted….”
We have also noted that the ld. DR could not allude towards any distinguishment of facts of the present case with that in Spectrum Talent Management (supra). Accordingly, in respectful compliance to the decision cited above and for the purposes of consistency, it is held as the Revenue has failed to place on record specific defects in assessee’s claim and that the impugned addition is based upon mere ad hoc estimation, the same deserves to be deleted. Accordingly, we set-aside the order of the ld. CIT(A) and direct the ld. AO to delete the additions made by it on account of ad-hoc disallowance of Rs.1,50,000/- for conveyance expenditure, of Rs.2,50,000/- of printing and stationary expenses, of Rs.2 lakhs for repair and maintenance expenses and of Rs.2 lakhs for sales promotion expenses. The grounds of appeal of the assessee no.1 to 7 are therefore allowed.
Ground of appeal no.8 on the issue of charging of interest under section 234A, 234B and 234C is consequential in nature and hence dismissed as infrcutous.
In the result, the appeal of the assessee is partly allowed.