AARAV FRAGRANCES AND FLAVORS P.LTD, THANE V. ACIT CIR 1, THANE

ITA 2053/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1732 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 23-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Assessee Lawyers: K K LALKAKA
• Section: 69C; 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 2053 / MUM/20 17 ( ASSESSMENT YEAR : 2010 - 11 ) M/S. AARAV FRAGRANCES AND FLAVORS PVT. LTD., AARAV HOUSE, PLOT NO.A.152/153, ROAD NO.25 , WAGLE INDUSTRIAL ESTATE THANE (W) 400 604 VS. COMMISSIONER OF INCOME TAX (APPEALS) - 1 ROOM NO.29, A WING SIXTH FLOOR,ASHAR IT PARK ROAD NO.16 - Z, WAGLE INDUSTRIAL ESTATE, THANE (W) 400 604 PAN/GIR NO. AAGCA2145K APPELLANT ) .. RESPO NDENT ) ASSESSEE BY SHRI K.K. LALKAKA REVENUE BY SHRI CHAITANYA ANJARIA DATE OF HEARING 28 / 08 /201 8 DATE OF PRONOUNCEMENT 30 / 08 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A) - 1, THANE DATED 28/12/2016 FOR A.Y.2010 - 11 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961. 2. THE ONLY GRIEVANCE OF ASSESSEE RELATES TO ADDITION OF RS.3,65,362/ - U/S.69C OF THE IT ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. ITA NO. 2053/MUM/2017 M/S. AARAV FRAGRANCE & FLAVORS PVT. LTD., 2 4. FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN MANUFACTURING OF FRAGRANCE COMPOUND S . DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT LEARNED AO ISSUED NOTICES U/S 133(6) OF THE ACT TO VARIOUS SUPPLIERS. OUT OF THIS , L EARNED AO HAS MADE DISALLOWANCE U/S 69C OF THE ACT AMOUNTING TO RS. 4,61,559/ - BEING POSITIVE DIFFERENCES I.E. ASSESS E E COMPANY SHOWING MORE PURCHASES THAN CONFIRMED BY THE SUPPLIERS THE DISALLOWANCES ARE AS FOLLOWS: - SR.NO. NAME OF THE PARTY AMOUNT AS PER ASSESSEE COMPANY (INRS.) AMOUNT AS PER REPLY RECEIVED FROM THE SUPPLIER (IN RS.) DIFFERENCE (IN RS.) 01 ASSOCIATE ALLIED CHEMICALS(L NDIA) PVT.LTD. 50,66,641/ - 49,69,421 97,220/ - 02 RISHICHEM DISTRIBUTORS PVT.LTD. 25,64,0707 - 2 1,99,7347 - 3,64,336/ - 03 GOPAL ENTERPRISES 16,22,3537 - 16,22,3527 - 1 / - TOTAL 4,61,559/ - 5. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ADDITION OF RS.3,64,316/ - IN RESPECT OF RISHICHEM DISTRIBUTORS PVT. LTD., AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT ASSESSEE HAS NOT RECEIVED ANY DISCOUNT FROM THE PARTY. THE AMOUNT OF RS.3,65,362/ - AS DISCOUNTING C HARGES IN ITS BOOKS OF ACCOUNTS IS INSTEAD A ITA NO. 2053/MUM/2017 M/S. AARAV FRAGRANCE & FLAVORS PVT. LTD., 3 PAYMENT MADE BY THE ASSESSEE COMPANY BY CH. NO.000526 DRAWN ON BANK OF INDIA DT. 24/08.2009. WE ALSO FOUND THAT THE ASSESSEE COMPANY HAS PRODUCED BEFORE AO FOR VERIFICATION THE COPIES OF LEDGER ACCOUNTS ALONG WI TH THE COPIES OF PURCHASE INVOICES, EXCISE AND TRANSPORT DOCUMENTATION OF THE MENTIONED PARTIES THE SUBMISSION ON SAMPLE BASIS OF THE MENTIONED INVOICES AND DOCUMENTS ALONG WITH THE COPIES OF LEDGER ACCOUNTS WAS MADE DT.18.03.2013. THE ACCOUNTING OF THESE PURCHASES WERE BASED UPON THE MENTIONED DOCUMENTATION HENCE THE PARTY SHOWING LESSER AMOUNT OF SALES IN THEIR BOOKS DOES NOT ALTER THE CHARACTER OF THE TRANSACTIONS AS NOT GENUINE. THESE DIFFERENCES ARE PRIMARILY TIMING DIFFERENCES OR DIFFERENCE ARISING OU T OF RECORDING OF TRANSACTIONS UNDER DIFFERENT HEAD. 7. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE AO FOR APPLYING PROVISIONS OF SECTION 69C OF THE ACT IN RESPECT OF THE DIFFERENCE IN THE ACCOUNT. 8. IN THE RESULT, APPEA L OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 / 08 /201 8 SD/ - ( AMARJIT SINGH ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 30 / 08 /201 8 KARUNA SR. PS ITA NO. 2053/MUM/2017 M/S. AARAV FRAGRANCE & FLAVORS PVT. LTD., 4 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//