DCIT Vs Trimurti Concern Pvt. Ltd (ITAT Patna)
The case of DCIT vs. Trimurti Concern Pvt. Ltd., heard by the ITAT Patna, centered on a dispute over the disallowance of business expenses claimed by the assessee for the assessment year 2014-15. The assessee, Trimurti Concern Pvt. Ltd., had originally filed a return declaring a total income of Rs. 28,87,270. However, during a scrutiny assessment, the Assessing Officer (AO) made a significant addition of Rs. 4,68,55,195 to the assessee’s income, citing alleged discrepancies and the use of self-generated vouchers for a large number of outward expenses.
Dissatisfied with the AO’s order, the assessee appealed to the Commissioner of Income Tax (Appeals), or CIT(A). The CIT(A) reviewed the case, taking into account the specifics of the assessee’s business, which involved numerous transactions, and granted partial relief. The CIT(A) restricted the disallowance of expenses to just 2% of the total amount, effectively reducing the tax liability. This decision was based on the premise that while some documentation issues existed, the overall nature of the business and the large volume of transactions supported the claim of the expenses being genuine.
The Income Tax Department subsequently appealed the CIT(A)’s order to the ITAT Patna, arguing that the relief was arbitrarily granted without proper verification. The department raised suspicion about the authenticity of the expenses, noting that they were incurred over only 28 business days and were supported by “self-generated vouchers.” The department contended that the assessee had failed to produce ledgers and other supporting documents for verification at the assessment stage. The assessee, in a cross-objection, maintained that the CIT(A) had conducted a thorough analysis and that the department’s appeal was based on assumptions rather than facts.
