Allegation of bogus purchase without verification of books not justifiable: Kerala HC

Diamond Food Products Vs CIT (Kerala High Court) Kerala High Court held that allegation regarding bogus purchases of raw-material i.e. paddy without verification of books of accounts including stock register, ledger, etc. is not justifiable in law. Accordingly, disallowance u/s. 37(1) of the Income Tax Act set aside. Facts- The appellant had filed its return of income declaring a total income of Rs.71,15,290/- by declaring a net profit of 0.91%. While completing the assessment, the assessing authority considered the appellant’s claim for deduction of the amount spent for purchasing paddy...