Sec. 37(1) – Business expenditure – Disallowance of ‘discount/claim/shortage/deduction’ expenses made solely on proportionate comparison with preceding year without enquiry into supporting details or defects in books – Not sustainable – Matter restored for de novo assessment Sec. 250(6) – Commissioner (Appeals) – Ex parte dismissal of appeal for non-prosecution without adjudicating issues on merits, without specifying points for determination, decision thereon and reasons – Order unsustainable and liable to be set aside.

42. [2026] 134 ITR(T) 49 (Agra - Trib.)

Hari Om Agarwal v. Income-tax Officer

A.Y.: 2017-18 DATE: 17.01.2025

Sec. 37(1) – Business expenditure – Disallowance of ‘discount/claim/shortage/deduction’ expenses made solely on proportionate comparison with preceding year without enquiry into supporting details or defects in books – Not sustainable – Matter restored for de novo assessment Sec. 250(6) – Commissioner (Appeals) – Ex parte dismissal of appeal for non-prosecution without adjudicating issues on merits, without specifying points for determination, decision thereon and reasons – Order unsustainable and liable to be set aside.

FACTS

The assessee, a proprietary concern engaged in trading of grains and pulses, filed return of income declaring income of Rs.7.89 lakhs for A.Y. 2017-18. During the relevant previous year, the assessee’s turnover increased to Rs.16.36 crores as against Rs.6.62 crores in the preceding year.

The Assessing Officer observed that general administration and selling expenses had increased to Rs.68.92 lakhs from Rs.13.74 lakhs and that expenditure under the head ‘Discount/claim/shortage/deduction’