ITAT overturned the AO's disallowance of Rs.36,25,56,616 across ...

Tax Authorities Cannot Disallow Legitimate Journal Entries Without Evidence of Bogus Expenses Under Section 145(3)

April 3, 2025

Case Laws Income Tax AT

ITAT overturned the AO's disallowance of Rs.36,25,56,616 across five assessment years for alleged bogus bulk journal entries, finding they were legitimate transfers between ledger accounts. The Tribunal upheld CIT(A)'s findings that individual site operating expenses were properly documented with TDS deductions, year-end provisions were valid, and cash payments for coolie and wages couldn't be entirely disallowed as bogus. ITAT rejected Revenue's alternative arguments under s.40A(3) and s.40(a)(ia), noting these provisions were inapplicable to the expenses in question. However, the Tribunal agreed with CIT(A) on rejecting the assessee's books under s.145(3), but modified the profit estimation from 12.5% to 10% of contractual receipts, considering contemporary economic conditions rather than outdated precedents from the 1980s-90s.

View Source

← Previous Next →

ITAT overturned the AO's disallowance of Rs.36,25,56,616 across ...

Tax Authorities Cannot Disallow Legitimate Journal Entries Without Evidence of Bogus Expenses Under Section 145(3)

April 3, 2025

Case Laws Income Tax AT

You may also like:

Penalty u/s 271D - entries through journal entries - Violation of provisions of section 269SS - round tripping of funds to evade taxes - proof of reasonable cause u/s...

The ITAT Delhi addressed an addition u/s 41(1) converted from u/s 68, focusing on whether there was actual receipt of money or just journal entries for account...

The ITAT held that where a partnership firm repays loans to its partners by journal entries/book entries, such transactions are not covered u/ss 269SS/269T of the Act,...

The case pertains to the confiscation of foreign marked gold bars by customs authorities. The appellant claimed the gold was procured from a legitimate source and was...

Penalty levied u/s. 271D - transactions through journal entries - assessee shall be deemed to have had reasonable cause to receive the deposits/loans through journal...

Bogus STCL - Disallowance of Loss arising from the trading in shares - accommodation entry of STCL - the fact remains that the findings of the lower authorities are not...

Tribunal held Adjudicating Authority's order cryptic, failing to examine appellants' defense regarding legitimate procurement and supply of gold as business transaction....

Confiscation of the gold bars - remelted gold of foreign origin or not - The admissibility and weight of retracted statements - The Tribunal found that the appellants...

Levy of Entry Tax - stock transfer price - validity of Equalized List Price (ELP), adopted by the appellant - As per Section 4 of the Entry Tax Act, the entry tax...

Addition u/s 68 as accommodation entries - long term capital gain on sale of shares as sham/bogus transaction - Mere suspicion cannot be a ground for treating the...

Deemed dividend u/s 2(22)(e) was added by the Assessing Officer (AO) on the grounds that the assessee, a director and substantial shareholder in a private company, had...

Royalty's nature - not a tax but contractual consideration paid by mining lessee to lessor for enjoying mineral rights. Entry 50 List II empowers State legislatures to...

Exemption u/s.10(23) denied - anonymous donations received by any assessee or entity u/s.115BBC - without verifying the documents and objectively selecting some entries...

The High Court held that once the Income Tax Appellate Tribunal (ITAT) found no cogent or convincing evidence from the Revenue to allege bogus purchases, it was wrong to...

Estimation of income - bogus purchases - quantification of profit - The Tribunal noted that during investigations, the alleged suppliers were identified as bogus...

Quick Updates: