Vayam Technologies Ltd Vs DCIT (ITAT Delhi)
ITAT Delhi held that disallowance of purchases and restricting the amount of purchases to 12.50% without examining the documentary evidences produced by the assessee is unjustified. Accordingly, matter remanded back to AO with direction to decide afresh.
Facts- Vayam Technologies Ltd. (the assessee) opposes the disallowance of purchases by AO, asserting the compliance with regulatory requirements.
It is argued that the purchases and sales transactions were reported to the VAT & Service Tax Department. The Income Tax Department has accepted sales but disallowed purchases, without recognizing the correlation of no sales without purchases. Payments for purchases were made through banking channels, and acceptance of 31 out of 51 parties in consideration itself proves the genuineness of the transactions. Disallowing unverified parties and restricting the amount of purchases to 12.50 is arbitrary without assigning any basis for the same, and adding it u/s. 69C. The basis of arriving at 12.50% has not been provided. Every assessee has a different profit margin model, and it cannot be generalized by considering other assessee of the same or different business.
Conclusion- Held that justice should not only he done but it appears to be done and in order to achieve the noble goal of justice and before reaching any conclusion it is expedient to consider, all the material/ documents in existence and produced and whatever it is, if one more opportunity provided to assessee /appellant, object of justice will be served to some extent. Thus, for this purpose, we are inclined to remit back the matter to Ld. AO with the direction to decide afresh.
