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Facts
The assessee's appeal for AY 2020-21 arises from an order disallowing total expenses of Rs.1,36,69,071/- at 10%, amounting to Rs.13,66,907/-, due to lack of detailed supportive evidence. The delay in filing the appeal was condoned.
Held
The Tribunal found that the assessee, a commission agent in the vegetable market, could not sufficiently prove the impugned expenditure. However, the disallowance of 10% by the lower authorities was considered on a higher side. Therefore, a lump-sum disallowance of Rs.1,00,000/- was deemed appropriate, with the condition that it would not be treated as a precedent.
Key Issues
Whether the disallowance of expenses due to lack of evidence was justified, and if so, at what quantum.
Sections Cited
143(3)
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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 2020-21 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1078383900(1) dated 11.07.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Delay of 44 days in filing of the instant appeal is condoned in the larger interest of justice in light of Collector Land Acquisition vs. Mst. Katiji & Ors (1987) 167 ITR 471 (SC).
Next comes the sole substantive issue between the parties. It emerges from a perusal of the case records that all what both the learned lower authorities’ have done is to disallow the assessee’s total expenses of Rs.1,36,69,071/- @10%; coming to Rs.13,66,907/- quoting lack of the necessary detailed supportive evidence, in the course of assessment as upheld in the lower appellate proceedings.
4.1 This is what leaves the assessee aggrieved.
I have given my thoughtful consideration to the assessee’s and the Revenue’s respective submissions. Both the parties could hardly dispute the clinching facts emerging from the case records that neither the assessee; a commission agent in vegetable market, has been able to plead and prove the impugned expenditure of Rs.1,36,69,071/- to the entire satisfaction of both the learned lower authorities nor the department has been able to justify the impugned disallowance @10% which apparently appears on a bit higher side. Be that as it may, it is thus deemed appropriate that a lump sum disallowance of Rs.1,00,000/- keeping in mind the assessee’s kacha arhtiya business, would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.