Blue Lotus Developers Vs DCIT (ITAT Agra)
ITAT Agra Deletes Ad-hoc Expense Disallowance Without Rejection of Books; Assessment u/s 143(3) Upheld
The Agra Bench of the ITAT partly allowed the assessee’s appeal, deleting an ad-hoc disallowance of ₹6.50 lakh made towards site development and road expenses, while upholding the validity of assessment framed under section 143(3). The Assessing Officer had disallowed the expenses on the ground that supporting vouchers were incomplete and largely self-made, without rejecting the books of account under section 145(3).
The Tribunal noted that the assessee had produced ledger accounts, sample invoices, and vouchers duly signed by recipients, and that all payments were made through banking channels. In the absence of rejection of books or specific defects in accounts, the ITAT reiterated that no estimated or ad-hoc disallowance can be made merely on suspicion. Accordingly, the disallowance of ₹6.50 lakh was directed to be deleted.
On the legal issue, the Tribunal rejected the assessee’s additional ground challenging the jurisdiction, holding that since the satisfaction under section 153C related to AY 2012-13 itself, the assessment for that year was correctly framed under section 143(3). Thus, while the expense disallowance was deleted, the jurisdictional challenge failed, and the appeal was partly allowed
FULL TEXT OF THE ORDER OF ITAT AGRA
