ACIT Vs Jaipur Golden Transport Co. Private Limited (ITAT Delhi)
Ad-hoc Expense Disallowances Partly Restored; 50% of AO’s Additions Sustained – ITAT Delhi
The Delhi Bench of the ITAT, in ACIT vs. Jaipur Golden Transport Co. Pvt. Ltd. (ITA No.4990/Del/2024, AY 2012-13, order dated 19-12-2025), partly allowed the Revenue’s appeal and held that while purely arbitrary ad-hoc disallowances are impermissible, the assessee also cannot escape scrutiny where supporting evidence and compliance were found wanting.
The Tribunal examined disallowances made by the AO towards advertisement expenses (₹75 lakh), truck freight (₹96.50 lakh), crossing charges (₹48 lakh) and printing & stationery (₹8 lakh). While the CIT(A) had deleted the entire additions holding them to be ad-hoc and based on suspicion, the ITAT found that both authorities had gone to extremes—the AO by making high estimations and the CIT(A) by deleting them in toto.
ITAT observed that in a transport business, commercial expediency of such expenses cannot be ruled out, but at the same time, the assessee failed to fully substantiate the claims with cogent evidence, and third-party verifications were partly non-compliant. In such circumstances, some element of estimation was justified, though the AO’s quantum was excessive.
Balancing equities, the Tribunal set aside the orders of both the AO and CIT(A) and directed that the disallowances under all four heads be restricted to 50% of the amounts originally disallowed by the AO. Consequently, the Revenue’s appeal was partly allowed
FULL TEXT OF THE ORDER OF ITAT DELHI
