Tax Tribunal Scrutinizes Business Expenses, Disallows Bogus Purchases, On-Money Receipts, and Excessive Director Salary Payments

ITAT adjudicated multiple tax-related issues for the assessee. Key outcomes include: (1) Bogus purchases disallowed at 50%; (2) On-money receipts remanded to AO for reassessment at 10% with expense set-off; (3) Cash interest payments disallowed under section 40A(3); (4) Unexplained cash deposits and ITS data-based additions largely rejected; (5) Disallowance under section 14A restricted to exempt income; (6) Salary paid to director's non-working wife disallowed. The Tribunal largely upheld the AO's assessments with partial relief, maintaining the principle of strict scrutiny of unexplained financial transactions and adherence to tax regulations. .....

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