Adhoc disallowance of expenses merely on the basis of suspicion is not tenable

Pyung HWA India Private Limited Vs DCIT (ITAT Chennai) ITAT Chennai held that adhoc disallowance of expenses merely on the basis of suspicion without adequate evidence and cogent reason is not tenable in law. Accordingly, adhoc disallowance under repair and maintenance and sundry expense set aside. Facts- During the course of assessment proceedings, the AO observed that on perusal of the financials, the sales had gone up by 5%. However, the increase in repair and maintenance expenses was disproportionate to sales, considering the increase in sales and was not reasonable for the purpose of busi...