Biolife Medical Pvt. Ltd Vs ACIT (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT), Delhi bench, has partially allowed an appeal by Biolife Medical Pvt. Ltd., reducing an ad hoc disallowance on expenses from 10% to 4%. The ruling, pronounced on June 27, 2025, addresses a dispute over a Rs. 17,13,608/- addition by the Assessing Officer (AO) for Assessment Year 2017-18, covering employee benefits, power, fuel, and repairs.
Biolife Medical had argued the AO’s 10% disallowance was based on presumptions, lacking adverse material or evidence. The company also raised a procedural concern, stating the Commissioner of Income-tax (Appeals) [CIT(A)] dismissed their appeal without considering a timely filed revised form, violating natural justice. During the ITAT hearing, the assessee was unrepresented, leading to an ex parte proceeding.
The ITAT observed that neither the assessee fully proved its expense claims nor could the Revenue provide comparable data to justify the 10% ad hoc disallowance. Recognizing these shortcomings from both sides, the Tribunal opted for a balanced resolution. In the “larger interest of justice,” the ITAT deemed it appropriate to reduce the disallowance to 4% of the total expenses.
Crucially, the Tribunal explicitly stated that this decision should not be treated as a precedent, indicating it’s a specific resolution for the unique facts of this case rather than a general rule. This outcome underscores the judiciary’s role in finding practical solutions when evidence from both taxpayers and tax authorities is incomplete. The assessee’s appeal was thus partly allowed.
