GST Registration Not a Precondition for Expense Deduction: Delhi ITAT
In a noteworthy ruling in Roopa Rana Infrastructures (P) Ltd. vs DCIT [2025] 174 taxmann.com 655 (Del Trib), the Delhi ITAT held that business expenditure cannot be disallowed under Section 37(1) of the Income-tax Act, 1961 merely because the vendors were not registered under GST.
The assessee, engaged in construction, had made payments via banking channels after deducting TDS, and the genuineness of transactions was not in doubt. Despite this, the AO and NFAC had disallowed expenses of Rs. 49.48 lakh solely on the basis of non-GST registration. The Tribunal rejected this reasoning, observing that the Act does not mandate GST registration as a condition for deduction and directed deletion of the disallowance. This judgment reinforces that absence of GST registration alone cannot render a genuine business transaction ineligible for deduction.
The copy of the order is as under:
