Disallowance of purchases limited to 25% where sales, stocks and supplier GST corroborate; appellate reduction upheld.

Where trading books, admitted sales and quantified opening and closing stocks were accepted and supplier GST returns and account confirmations were produced, complete disallowance of purchases was found unwarranted; the Tribunal upheld a limited quantified adjustment because certain transportation and supplier-compliance documents remained deficient, so full disallowance could not be sustained. The assessing officer's blanket disallowance was therefore reduced to 25% on the factual and documentary balance, and the Tribunal declined to interfere with the appellate authority's restriction of the addition.

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Issues: Whether the Appellate Tribunal should interfere with the Commissioner of Income Tax (Appeals)'s decision to restrict the assessing officer's disallowance of purchases to 25% where sales, opening and closing stocks were accepted and certain supplier records and GST returns were produced but some supporting documents were deficient.

Analysis: The facts show trading operations with audited books, quantified opening and closing stocks, accepted sales, and supplier GST returns and account confirmations produced before the authorities. Notices under the statute to suppliers remained uncomplied with and some transportation and other supporting documents were deficient as recorded in the remand report. The assessing officer made a full disallowance under the relevant income-tax provisions on the basis of alleged fabricated documents and non-compliance by suppliers. The appellate authority examined the available documentary matrix-accepted sales and stocks, GST filings, banking payments and supplier confirmations-while also noting deficiencies in transportation and other supporting evidence. On this factual and documental balance, complete disallowance was held to be not justified but the inability of the assessee to fully substantiate all purchases warranted a limited adjustment.

Conclusion: The Tribunal concurs with the appellate authority's limitation of the addition to 25% and declines to interfere with that reduction of the assessing officer's disallowance.

Ratio Decidendi: Where sales and stock figures are accepted and corroborative supplier GST returns and account confirmations are produced, complete disallowance of purchases is not warranted; a quantified limited disallowance is appropriate where material supporting documents are deficient.

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