Axora Resources Limited Vs ITO (ITAT Kolkata)
ITAT Kolkata Deletes Additions on WIP, Expenses & Purchases – Adhoc Disallowance Unsustainable- Tribunal Quashes ₹7.40 Cr. Purchases Addition & ₹63 Lakh Expenses Disallowance
ITAT Kolkata Deletes Additions on WIP, Expenses & Purchases – Adhoc Disallowance Unsustainable- Tribunal Quashes ₹7.40 Cr. Purchases Addition & ₹63 Lakh Expenses Disallowance
Tribunal Rejects 10% & 12.5% Adhoc Additions Made Without Rejection of Books- Purchases from Non-Filers Not Ground for Addition
Assessee filed appeal against the order of CIT(A), NFAC, dated 04.06.2025.
Ground on WIP Addition: AO noticed capital WIP of ₹2.55 crore & , citing lack of head-wise details, disallowed 10% (₹25.55 lakh) on presumption. CIT(A) confirmed. Tribunal held that such WIP was capital in nature, not charged to P&L, & no disallowance can be made on surmises. Addition deleted.
Ground on Expenses Disallowance: AO disallowed 10% (₹63.16 lakh) of expenses like rent, legal, professional, insurance & selling expenses, citing sharp increase & lack of details. CIT(A) upheld. Tribunal observed that books were audited, not rejected, & AO had granted insufficient time for furnishing details. Adhoc disallowance without rejecting books is unsustainable. Addition deleted, relying on CIT Vs Anil Kumar & Co (Karnataka HC) & PCIT Vs Marg Ltd (Madras HC).
