Disallowance for plugging profit leakage cannot be supported: ITAT

Urban Infraprojects Pvt. Ltd. Vs ACIT (ITAT Kolkata) In the present case, the assessee is is in the business of civil construction. The AO has disallowed ad-hoc 10% of operating and other expenses because the portions of the bills of self made debit vouchers are not verifiable. ITAT states that, anyhow disallowing 10% of the expenditure on the ground that profit leakage has to be plugged cannot be supported. Keeping in view the facts and circumstances of the case, some disallowance of a random amount of 5 lakhs, in our view, would meet the end of justice. In the result, the balance disallowanc...