Tribunal Decision Overturned for Lack of Documentary Evidence in Income-tax Disallowance Case

The High Court of Rajasthan overturned the Tribunal's decision to disallow 15% of purchases made from SKS, emphasizing the importance of documentary evidence over oral statements during a search operation. The Court found that payments were made through banking channels and the appellant complied with VAT regulations, leading to the rejection of the disallowance without proper justification under section 145 of the Income-tax Act.

---

---

The High Court of Rajasthan admitted the case for consideration of substantial questions of law regarding the disallowance of 15% of purchases made from SKS. The Tribunal's reliance on oral statements during a search operation was questioned in light of documentary evidence showing payments through banking channels and VAT compliance. The Tribunal's decision to disallow purchases without rejecting the appellant's books of accounts under section 145 of the Income-tax Act was also challenged.

---