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Facts
The assessee's appeal for Assessment Year 2022-23 arises against the CIT(A)/NFAC, Delhi's order. The assessee is aggrieved by the disallowance of a lump sum of Rs.6,91,350/- representing a portion of its various expenditure claims.
Held
The impugned expenses, such as staff welfare, bank charges, business promotion, and discounts, could not be entirely ruled out but the assessee also failed to prove the relevant facts. A lump sum disallowance of Rs.1,00,000/- is deemed appropriate and should not be treated as a precedent.
Key Issues
Whether a lump sum disallowance of expenditure claims is justified when the nature of expenses is not entirely ruled out, but full substantiation is also lacking.
Sections Cited
143(3), 147
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2022-23 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1082574224(1) dated 13.11.2025, in proceedings u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It transpires during the course of hearing that the assessee/appellant is aggrieved against both the learned lower authorities’ action disallowing a lump sum figure of Rs.6,91,350/- representing a portion of it’s various expenditure claims; in assessment order dated 27.03.2024 as upheld in the lower appellate discussion.
Suffice to say, the assessee’s impugned expenses are found to be in the nature of staff welfare bank charges, business promotion, discount etc. which neither could be altogether ruled out in day to day activity nor it has been able to plead and prove the relevant facts before both the learned lower authorities. Be that as it may, it is deemed appropriate in this peculiar backdrop that a lump sum disallowance of the assessee’s impugned claim to the tune of Rs.1,00,000/- only would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.5,91,350/- in other words. Necessary computation to follow.