Adhoc Disallowance U/S 40A(2)(a) Based on Suspicion Not Sustainable: ITAT Hyderabad

DCIT Vs Sri Chaitanya Educational Committee (ITAT Hyderabad) ITAT Hyderabad held that adhoc disallowance under section 40A(2)(a) of the Income Tax Act merely on the basis of suspicion and surmises without adequate evidence not sustainable in law. Accordingly, order of CIT(A) upheld and appeal of revenue dismissed. Facts- Sri Chaitanya Educational Committee is registered under the Societies Registration Act and registered with Register of Societies, Machilipatnam, Krishna District in the year 1987 with the predominant object of establishing, running, aiding educational institutions and hostel f...