Procedural fairness in assessment requires meaningful opportunity to explain documentary evidence before disallowance of purchase expenses is finalised.

Purchase expense disallowance was not sustained on merits because the assessee had filed bills and supporting documents, but the Assessing Officer did not properly consider them or give a meaningful opportunity to explain alleged defects. The assessment process was found unfair, so the addition was remanded for fresh examination after granting a reasonable opportunity of being heard.

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Issues: Whether the disallowance of purchase expenses should be sustained on merits or the matter required remand for want of proper opportunity to explain the documentary evidence.

Analysis: The assessee had furnished the relevant bills and supporting material, but the record indicated that the Assessing Officer proceeded to disallow the expenditure without properly considering the documents and without affording a meaningful opportunity to meet the objections regarding the alleged defects in the bills. In these circumstances, the dispute was not decided on merits and the fairness of the assessment process required reconsideration.

Conclusion: The matter was remanded to the Assessing Officer for fresh examination of the addition of Rs. 35,42,719/- after granting the assessee a reasonable opportunity of being heard.

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