Loading judgment…
Facts
The assessee, engaged in the sale and purchase of computer parts, declared a total income of Rs. 53,62,490/-. The Assessing Officer (AO) completed the assessment at Rs. 1,09,08,972/-, making disallowances on purchases and expenses due to non-compliance and lack of details.
Held
The Tribunal held that while purchases could not be entirely dismissed as bogus given the suppliers, they were not sufficiently substantiated. Therefore, 1% of the purchase amount was confirmed as an addition. The disallowance of 5% on unverified expenses was also sustained.
Key Issues
Whether the disallowances made by the AO on purchases and expenses were justified, considering the assessee's claim of providing documentary evidence and the suppliers' non-response to notices.
Sections Cited
250, 143(3), 144B, 133(6), 80C, 80D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’: NEW DELHI
O R D E R
PER MANISH AGARWAL, AM:
The present appeal is filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘CIT(A)’ in short], dated 09.06.2025 passed u/s 250 of the Income Tax Act, 1961 arising out of assessment order dated 12.03.2025 passed u/s 143(3) r.w.s 144B of the IT Act for Assessment Year 2023-24.
Brief facts of the case are that the assessee is an individual and filed his return of income on 29.09.2025 declaring total income of Rs.53,62,490/-. The assessee is engaged in the business of sale and purchase of computer parts, laptop, and all other accessories relating to software and hardware. The case of the assessee was selected for scrutiny under CASS and the assessment was completed by the AO wherein the total income of the assessee was computed at Rs.1,09,08,972/- by making
Rajiv Sharma vs. ITO disallowance @ 5% out of total purchase of Rs.10,42,56,278/- and further disallowance @10% out of the expenses claimed at Rs.15,86,675/- was made as the assesses failed to make compliance before the AO and further failed to file any details.
Before the Ld. CIT(A), assessee filed submissions and relevant details and after considering the same, the Ld. CIT(A) has confirmed the estimation of profits on the alleged purchases and disallowance out of various expenses, however, allowed the deduction u/s 80C and 80D to the assessee.
Aggrieved by the said order, the assessee is in appeal before the Tribunal by taking the following grounds of appeal: “The AO add income of Rs. 5371481 without considering the documentary evidence of purchase invoices, the assessee correctly purchased all the computer parts from the Big 4 suppliers namely, Microsoft computers of Rs.35204243, Premier Computers of Rs.43924323 and AT solutions Rs 25127712. the assesse provides all the purchase invoices, payment proofs and filing of GST returns. But the AO disallowed 10% of Total Purchase of Rs.104256378 i.e., Rs 5212814 only on the ground that the supplier did not respond to notice issued U/s 133(6). The AO only considered that the supplier did not reply the notice u/s 133(6) and only on the basis of non compliance of the notice by the supplier disallow purchase of Rs. 5212814. The AO do not take into consideration other relevant documentary evidence like confirmation of ledger given by the supplier to the assessee, purchase invoices, Payment made by the assessee to the supplier and Filing of GST returns. Therefore, Your Honor You are requested to consider it.”
Heard both the parties and perused the materials available on record. At the outset, it seen that assessee was provided ample opportunities by the AO, however, assesse has not filed any details. Before Ld. CIT(A) also, assessee has not been able to substantiate the purchases made by filing all the necessary evidences. It is observed that the assessee is dealing for the computers wherein the purchases have been made from the companies like Microsoft Computers, Premier Computers and Rajiv Sharma vs. ITO AT Solutions etc. and therefore, purchases cannot be held as bogus, however, the facts remained that the purchases has not been substantiated by the assessee. Therefore, looking to the entirety of facts, ain our considered opinion 1% of the purchase made is hereby held as unverified and accordingly we confirmed the addition to the extent of 1% of purchase of Rs.10,42,56,278/-. With respect to the disallowance made out of various expenses, since these expenses remained unverified in absence of the details, we sustained the disallowances @ 5% of the total expenditure claimed by the assessee of Rs.15,86,675/-. In view of above, all the grounds of appeal raised by the assessee are partly allowed.
In the result, the appeal of the Assessee is partly allowed. Order pronounced in the open court on 27.11. 2025.