Case Law Details
Sunil Dhirubhai Patel Vs ITO (ITAT Ahmedabad)
In a recent case before the Income Tax Appellate Tribunal (ITAT) in Ahmedabad, Sunil Dhirubhai Patel contested the addition of Rs. 1,74,00,000/- as bogus expenses in his assessment under s. 143(3) r.w.s. 147 of the Income Tax Act, 1961. The crux of the matter lies in the disallowance of expenses without the assessee’s claim in the relevant year.
Background: Sunil Dhirubhai Patel, an individual deriving income from construction and land development, faced scrutiny over alleged bogus expenses related to labor bills from specific parties. The Assessing Officer (AO) treated these expenses as bogus and added them to Patel’s total income.
Appeal Process: Patel appealed to the Commissioner of Income Tax (Appeals) (CIT(A)) against the AO’s decision. However, the CIT(A) upheld the addition, leading Patel to file an appeal before the ITAT Ahmedabad.
Arguments: Patel’s representative argued that the disputed expenses were actually incurred in the previous year but were paid in the year under consideration. They presented evidence, including ledger copies and bank statements, to support this claim. Additionally, since no deduction was claimed in the Profit & Loss account, they argued that disallowance was unwarranted.
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