PCIT Vs Paramount Residency Ltd (Delhi High Court)
Delhi High Court held that the disallowance of expenditure is not sustainable as the evidence and material produced by the assessee establish that it had incurred the expenditure as claimed. Thus, findings of ITAT cannot be perverse.
Facts- Present appeal has been preferred by the revenue. Notably, ITAT had found the case in favour of the assessee and held that purchases of the amount of ₹7,86,21,320/-, which were alleged to be bogus purchases and were disallowed as expenditure, are liable to be allowed considering the documents and material produced by the Assessee.
Conclusion- ITAT found that the disallowance of expenditure is not sustainable and found that the evidence and material produced by the assessee establish that it had incurred the expenditure as claimed. ITAT found that there is no dispute that, in fact, the assessee had made payments through banking channels to its suppliers and there was no evidence or suggestion that cash had been repaid by the said suppliers to the assessee.
It is also apposite to note that there is no material on record to indicate that there is any serious doubt as to the physical material shown to be purchased from the four entities in question, was used by the assessee in its activities. The stock registers produced by the assessee were not rejected by the AO. It is also apparent that the assessee had established that it made payments through banking channels against the supply of materials, which were duly reflected in its stock registers.
