Waseem Alam Vs ITO (ITAT Patna)
The Income Tax Appellate Tribunal (ITAT), Patna has set aside a previous order against an assessee, Waseem Alam, and remanded the matter back to the Assessing Officer for a fresh review. The tribunal’s decision allows the assessee a new opportunity to submit documentary evidence to substantiate a significant expense claim that was previously disallowed.
The case pertains to the Assessment Year 2018-19, for which Waseem Alam had filed a return declaring a total income of Rs. 9,68,550. The matter was subsequently selected for limited scrutiny under the e-assessment scheme, focusing on a large deduction claimed under Section 57 of the Income Tax Act.
According to the records, the assessee had declared income from various heads, including contract work, dairy, transport, and hostel rent, totaling over Rs. 64 lakh. Against this income, a deduction of Rs. 58,83,717 was claimed under Section 57. This section permits deductions for expenditures incurred “wholly and exclusively for the purpose of making or earning such income.”
During the initial scrutiny, the Assessing Officer issued a notice seeking details and substantiation for the claimed expenses. While the assessee uploaded some documents electronically, the officer found the details to be incomplete and insufficient. The Assessing Officer also noted that the large expense claim had not been routed through a proper profit and loss account, which raised procedural concerns. As the assessee failed to provide the necessary breakup and documentary evidence as mandated by Section 57, the Assessing Officer proceeded to disallow the entire deduction and completed the assessment.
