Disallowance of bogus purchase claim fails where the amount was never debited to the profit and loss account.

A disallowance for alleged bogus purchases of jowar could not be sustained where the assessment record showed that the amount had not been debited to the profit and loss account. On that factual basis, no expenditure claim existed in the accounts, so the sum could not be disallowed as a claimed business expense. The alternate ground became academic once this footing failed, and the disallowance was deleted in favour of the assessee.

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Issues: Whether the disallowance of Rs. 10,00,538 made on account of alleged bogus purchases of jowar was sustainable when the amount had not been debited to the profit and loss account.

Analysis: The assessment order recorded that the impugned purchases were treated as both unverifiable and not debited to the profit and loss account. On that factual footing, the amount could not be disallowed as an expenditure claim in the profit and loss account, since no such claim had been made by the assessee. The alternate ground became academic once this disallowance was deleted.

Conclusion: The disallowance of Rs. 10,00,538 was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded on the sole substantive dispute concerning the jowar purchase disallowance, and the remaining alternate claim did not require adjudication.

Ratio Decidendi: A sum cannot be disallowed as an expenditure where, on the facts found, it was not claimed or debited in the profit and loss account.

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