Income Tax Officer vs Piyare Lal Kishan Lal

This Revenue’s appeal and the assessee’s cross objection i.e., ITA No. 6416/Del/2025 & CO No. 265/Del/2025 for assessment year 2017-18 arise against Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre (for short, ‘CIT(A)/NFAC’) order dated 14.08.2025 passed in DIN & Order No. ITBA/NFAC/S/250/2025-26/1079654905(1), involving proceedings u/s 143(3) of the Income Tax Act, 1961; hereinafter referred to as, ‘the Act’.

Heard both the parties. Case files perused.

The Revenue vehemently argues during the course of hearing that the learned CIT(A) has erred in law and on facts in reversing the assessment findings inter alia disallowing the assessee’s expenses incurred in purchase of clothes etc amounting to Rs. 1,59,11,000/- and Rs. 15,08,800/- as well as that incurred on cows/nandis to the tune of Rs. 43,80,134/-; respectively. Learned Departmental Representative’s case accordingly is that we ought to go by the Assessing Officer’s detailed reasoning rejecting the assessee’s impugned claims in light of overwhelming supportive material that the same are bogus in nature. The assessee, on the other hand, strongly supports the CIT(A)’s lower appellate discussion that both these disallowances have been rightly deleted since separated by its cogent evidence filed in both the lower proceedings.

We have given our thoughtful consideration to the Revenue’s respective vehement submissions and find no reason to accept either of their stands in entirety. We make it clear first of all that the assessee’s trust herein enjoys both section 12AA as well as section 80 registration. There is further no quarrel that its activities duly stand accepted in principle as what all both the learned lower authorities have done is to disallow the clothes and cow expenses claim only asper the detailed tabulation given in page 3 of the assessment order. The fact also remains that the assessee could not plead and prove both these impugned expenses to the entire satisfaction of the learned Assessing Officer as well although its activities prima facie have not been denied in principle. We are of the considered view in this factual backdrop that a lumpsump addition of Rs. 5 lakhs under these heads will meet the needs of justice with rider that the same shall not be treated as precedent. We order accordingly. Necessary computation shall follow as per law.

The Revenue’s instant appeal ITA No. 6416/Del/2025 succeeds in part.

Learned counsel representing the assessee does not press for its cross-objection CO No. 265/Del/2025 . Rejected accordingly.

These Revenue’s appeal ITA No. 6416/Del/2025 is partly allowed and the assessee’s cross-objection CO No. 265/Del/2025 is dismissed as not pressed in above terms. A copy of this common order be placed in the respective case files.