Pick And Choose Method Of Rejecting Certain Entries From Books Of Account Is Arbitrary: Delhi High Court

The Delhi High Court has held that any pick-and-choose method of rejecting certain entries from the books of account while accepting others without an appropriate justification is arbitrary and may lead to an incomplete, unreasonable, and erroneous computation of the income of an assessee.The bench of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav has observed that the ITAT has. The Delhi High Court has held that any pick-and-choose method of rejecting certain entries from the books of account while accepting others without an appropriate justification is arbitrary and may lead to an incomplete, unreasonable, and erroneous computation of the income of an assessee. The bench of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav has observed that the ITAT has made a categorical finding that despite the fact that the AO was provided with the requisite bills, vouchers, and addresses of the transacting parties, it did not make any effort to confirm the veracity of the alleged bogus or inflated bills. The department contended that the expenses claimed by the respondent-assessee are bogus or inflated expenses in order to substantially mitigate the taxable income, and therefore, the additions made by the AO to the total income of the respondent-assessee do not suffer from any perversity, material illegality, or arbitrariness.