Unsubstantiated Expenses: ITAT Ahmedabad Reduces Disallowance to 10%

Raj Quarry Vs DCIT (ITAT Ahmedabad) Income Tax Appellate Tribunal (ITAT) Ahmedabad has significantly reduced the ad-hoc disallowance of business expenses for Raj Quarry for Assessment Year 2014-15, restricting it to 10% of the claimed amount. The Tribunal found that the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] had failed to provide sufficient justification for the higher disallowances, especially when the assessee was already reporting a loss. Raj Quarry had declared a total income of (-)₹1,35,40,922. During assessment, the AO disallowed one-third of expe...