Priya Talwar Vs ITO (ITAT Delhi)
Undisputedly, the Assessing Officer has treated the purchases from certain parties as non-genuine and added back the entire amount to the income of the assessee. However, it appears on record that before the Assessing Officer the assessee has furnished the details of sales quantitative tally of purchase and sales etc. Therefore, the fact that the assessee had purchased the goods from some source is established. In such a situation, the entire purchase cannot be disallowed but the disallowance can be restricted to the profit element embedded in such purchases. In fact, adopting this approach in some other assessment years the Assessing Officer in assessee’s own case has restricted the disallowance to 5% in respect of purchases made from very same parties. In my view, the same yard-stick can be applied in the impugned assessment year as well. Therefore, I direct the Assessing Officer to restrict the disallowance to 5% of the total purchases of Rs.41,83,821/-. These grounds are partly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This is an appeal by the assessee against the order dated 1.08.2019 of learned Commissioner of Income Tax (Appeals)-10 [hereinafter referred to as CIT (Appeals)] New Delhi, for assessment year 2010-11.
2. Grounds raised by the assessee are as under:-
“1. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned reassessment order u/s 143(3)/147 without assuming jurisdiction as per law and thus Ld. CIT(A) ought to have quashed the impugned proceedings inter alia on the following grounds:-
