No ad-hoc disallowance can be made in absence of any specific material and without pointing out any defects in vouchers:

AO disallowed 10% of vehicle/diesel oil-grease expense. CIT(A) and ITAT found that there was no specific material with the AO for making such disallowance. Assessee had maintained all the vouchers for the said expenditure and increase in expenditure was justified on account of inflation in diesel prices. Hence, the lower appellate authorities held that AO couldn’t have made such ad-hoc disallowance without pointing out any defects in bills and vouchers maintained by the assessee. The Hon’ble High Court didn’t interfere with the said order of ITAT since the issue was purely based on facts.

[G.K. PATEL & CO. - TAX APPEAL NO.1580 of 2011 - GHC]