SR Blue Metals Vs DCIT (ITAT Chennai)
Summary: This appeal by the assessee was directed against the order of the CIT(A), NFAC, Delhi dated 20.01.2026, arising from the assessment order dated 21.03.2025 passed under section 143(3) read with section 144B of the Income-tax Act, 1961 for AY 2023-24. The assessee, a firm engaged in crushing stones and manufacturing and selling jelly and M-sand, had returned total income of Rs.11,35,90,330/-. The Assessing Officer disallowed commission expenditure of Rs.32,56,324/-, lorry tips/refreshment expenditure of Rs.62,30,330/-, and made an addition of Rs.1 crore under section 68 in respect of a loan received from Mr. A. Karuppaiah. The CIT(A) confirmed the additions.
In respect of the commission payment to Mr. Arumugasamy, the assessee produced his PAN, GST returns, GSTR-2B, TDS particulars and Form 26Q, together with evidence that the payment was made through banking channels. The disallowance had principally been sustained because the recipient did not respond to a notice under section 133(6). The Tribunal held that the assessee had furnished primary documentary evidence establishing the identity and transaction and that non-compliance by the recipient, which was not ordinarily within the assessee’s control, could not by itself establish that the transaction was non-genuine. As no material was shown to establish that the recipient was fictitious, the payment had flowed back to the assessee, or the supporting records were false or unreliable, the Tribunal directed deletion of the Rs.32,56,324/- disallowance.
