Ad hoc disallowance of expense without specifying particular mistake untenable

Dynamix India Drill-Con Co. Vs ACIT (ITAT Delhi) ITAT Delhi held that disallowances of expenditure on ad hoc basis without specifying particular mistake is untenable and bad in law. Facts- AO made ad hoc disallowance of Rs. 3 Lakhs against debit of Rs. 6,37,62,122/- as sub-contractor expenses and ad hoc disallowance of Rs. 2 Lakhs against total expenditure of Rs. 45,72,236/-. Further, AO made ad hoc disallowance of Rs. 87,351/- in case of business promotion expense. CIT (A) compared the assessee’s net profit and gross profit ratio for AYs 2013-14 & 2014-15 and noted that net profit of th...