Ad-hoc disallowance without books rejection reduced to 10% by ITAT Pune

Prafulla Shantilal Kothari Vs ACIT (ITAT Pune)

Assessee, an HUF, was engaged in the business of online lottery trading under the name “J.K. Lottery.” It filed a return declaring income of ₹51.25 lakhs.   AO made ad-hoc disallowances citing insufficient evidence for expenses claimed-30% each of salary expense , vehicle expense & travel expense and 50% of advertisement expense.

CIT(A) acknowledged that the disallowance rates used by the AO were on the higher side &   reduced all disallowances to 15% of the respective expenses holding that  while documents we

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