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ITAT allowed the taxpayer's appeal, reversing the disallowance of expenses under Section 37(1). Despite vendors not being GST-registered, the tribunal found the expenses genuine, as payments were made through banking channels with TDS deducted. The Assessing Officer's rationale of disallowing expenses solely on GST registration status was deemed incorrect. The tribunal emphasized that the Income Tax Act does not mandate expenses be incurred only with GST-registered entities. By examining submitted invoices and payment evidence, the tribunal concluded the expenses were legitimate and directed the AO to delete the addition, thereby providing relief to the assessee.
ITAT allowed the taxpayer's appeal, reversing the disallowance of expenses under Section 37(1). Despite vendors not being GST-registered, the tribunal found the expenses genuine, as payments were made through banking channels with TDS deducted. The Assessing Officer's rationale of disallowing expenses solely on GST registration status was deemed incorrect. The tribunal emphasized that the Income Tax Act does not mandate expenses be incurred only with GST-registered entities. By examining submitted invoices and payment evidence, the tribunal concluded the expenses were legitimate and directed the AO to delete the addition, thereby providing relief to the assessee.
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