Tooltech Global Engineering Pvt. Ltd. Vs ITO (ITAT Pune)
Professional Fees Disallowed for Lack of Evidence: ITAT Pune Upholds ₹6 Lakh Disallowance
The Pune SMC Bench of the ITAT dismissed the assessee company’s appeal for AY 2017-18, upholding the disallowance of ₹6 lakh claimed as professional fees under section 37(1). The Tribunal held that the assessee failed to prove that the expenditure was actually incurred and wholly and exclusively for business purposes.
The disallowance was sustained on multiple factual deficiencies:
- The recipient (a director of the assessee company) did not offer ₹6 lakh as income in his return.
- Form 26AS did not reflect the alleged payment.
- The assessee’s bank statement did not show payment of ₹6 lakh.
- No TDS evidence was produced for the alleged payment.
- The assessee relied only on self-made, unsigned invoices without serial numbers and ledger entries, which were held insufficient to establish a genuine transaction.
- The assessee could not even explain the nature of services rendered.
Reiterating that the onus under section 37(1) lies on the assessee, the ITAT held that mere book entries and unverifiable invoices cannot justify deduction. Accordingly, the ₹6 lakh disallowance was confirmed and the appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT PUNE
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