This article provides a detailed examination of the Income Tax Appellate Tribunal’s decision in the case of ITA No. 4707/DEL/2019, where Jagat Jewels challenged disallowances related to unverifiable purchases against the ITO, Ward-50(3), New Delhi for the assessment year 2013-14.
Jagat Jewels, a firm dealing in jewellery, faced scrutiny from the Income Tax Department regarding purchases claimed in their tax returns. The Assessing Officer (AO) raised concerns about the veracity of certain purchases, which were deemed to be unverifiable and thus disallowed, impacting the firm’s declared income.
The dispute escalated to the Income Tax Appellate Tribunal, where both parties presented their cases. The tribunal reviewed the evidences, including sales details, VAT returns, and bank statements, which supported the legitimacy of the purchases. However, the AO had treated these purchases as bogus based on information from third parties and past search reports unrelated to the current transactions.
The tribunal meticulously analyzed the submissions and the evidences provided by Jagat Jewels. It noted that despite the AO’s reservations, the firm had substantiated their claims with adequate documentary proofs, which were corroborated by the suppliers directly during the remand proceedings.
The tribunal’s decision to overturn the AO’s disallowances and accept the purchases as genuine highlights the importance of substantial documentation in tax disputes. This case sets a precedent on how the tribunals assess the evidences in disputes over unverifiable transactions.
Dispute Over Unverifiable Purchases: ITA No. 4707/DEL/2019, Jagat Jewels vs. ITO
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