Case Law Details
Jagat Jewels Vs ITO (ITAT Delhi)
he Income Tax Appellate Tribunal (ITAT) in Delhi recently passed a significant ruling in the case of Jagat Jewels Vs ITO. The case primarily focuses on the legitimacy of unverifiable purchases during income tax assessments. Both Jagat Jewels (the assessee) and the Income Tax Office (ITO) have appealed against the order by the Commissioner of Income Tax (Appeals).
Jagat Jewels, a jewelry trading firm, filed an income tax return for the Assessment Year (AY) 2013-14. The Assessing Officer (AO) raised concerns over the genuineness of purchases from multiple suppliers. Commissioner of Income Tax (Appeals) i.e. CIT(A), upheld most of the AO’s findings, leading to appeals from both sides at the ITAT.
The AO had initially disallowed the purchases on the grounds that they were ‘bogus,’ largely based on third-party search statements from years unrelated to the AY 2013-14. However, Jagat Jewels had provided comprehensive documentation, including ledger confirmations, bank statements, and notarized affidavits from suppliers confirming transactions.
The ITAT noted that the assessee had furnished all necessary documents to prove the legitimacy of the purchases. The tribunal ruled that merely disbelieving the purchases based on old, unrelated search statements was unjustifiable. The tribunal also stressed that the non-appearance of a supplier (Anshika Jewellers, in this case) doesn’t invalidate the transaction.
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