ACIT CIR 4 (2)(2), MUMBAI V. M/S KOTHARI FABTEX PVT LTD., MUMBAI

ITA 6732/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1395 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 31-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH LD
• Section: 143(3); 37(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE HONBLE SHRI AMARJIT SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.6732/MUM/2019 ( / ASSESSMENT YEAR: 2011-12) A CIT - CIRCLE - 4(2)(2) ROOM NO.640, 6 TH FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020 / VS. M/S. KOTHARI FAB TEX PVT.LTD. 50/52 KOTHARI CHAMBERS RAMWADI, KALBADEVI ROAD MUMBAI-400 002 '# ./ ./PAN/GIR NO. AAACK-2689-L ( !#% /APPELLANT ) : ( &'#% / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI GURBINDER SINGH-LD. DR / DATE OF HEARING : 05/07/2021 / DATE OF PRONOUNCEMENT : 05/07/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR AY 2011-12 CONTE ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-9, MUMBAI [CIT(A)], APPEAL NO. CIT(A)-9/(CIR.4)(2)(2)/52/2016-17 DATED 27/08/2 019 WHICH HAS GRANTED PARTIAL RELIEF TO THE ASSESSEE ON ACCOUNT O F DISALLOWANCE MADE BY LD. AO U/S 37(1) FOR RS.7.60 LACS. 2 2. AT THE TIME OF HEARING, NONE APPEARED FOR ASSESS EE. HOWEVER, THE MATERIAL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF T HE APPEAL. THE LD. DR PLEADED FOR RESTORATION OF ASSESSMENT AS FRAMED BY LD. AO U/S 143(3) R.W.S. 147 ON 19/09/2016. 3. THE MATERIAL FACTS ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, PURSUANT TO RECEIPT OF CERTAIN INFORMA TION FROM SALES TAX DEPARTMENT, MAHARASHTRA, IT TRANSPIRED THAT THE ASS ESSEE MADE SUSPICIOUS PURCHASES OF RS.7.60 LACS FROM AN ENTITY NAMELY M/S SHULABH TRADING COMPANY. THE SAID PURCHASES WERE IN THE SHAPE OF WRIST WATCHES WHICH WERE STATED TO BE GIVEN TO BUYE RS AS SALES PROMOTION. THUS THE EXPENSES WERE CLAIMED U/S 37(1) . IN SUPPORT OF PURCHASES, THE ASSESSEE PRODUCED LEDGER EXTRACTS, B ILLS AND BANK STATEMENT EVIDENCING THE PAYMENT TO THE SUPPLIER TH ROUGH BANKING CHANNELS. THE CONFIRMATION WITH DETAILS OF WRIST WA TCHES WAS ALSO FURNISHED ALONG WITH DETAILS OF SALES. HOWEVER, THE SUPPLIER COULD NOT BE TRACED AND THEREFORE, THE EXPENDITURE WAS DISALLOWE D. 4. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAD FI LED DOCUMENTARY EVIDENCES WHICH WERE NOT DISPROVED. THE RECEIPT AND UTILIZATION OF WRIST WATCHES COULD NOT BE IGNORED. THE LD. AO DID NOT CO NDUCT ANY FURTHER INQUIRY. THEREFORE, IT COULD BE CONCLUDED THAT THE ACTUAL PURCHASES WERE MADE FROM THE OPEN MARKET WHEREAS BILLS WERE PROCUR ED FROM THE SUPPLIER. IN SUCH A SCENARIO, IT WOULD BE REASONABL E TO MAKE AN ESTIMATED ADDITION OF 12.5% AGAINST THESE PURCHASES . AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. GOING BY THE FACTUAL MATRIX, WE CONCUR WITH THE ADJUDICATION OF LD. CIT(A) THAT RECEIPT AND UTILIZATION OF WRIST WATCHE S COULD NOT BE IGNORED. THE ASSESSEE MIGHT HAVE MADE SAVINGS BY PURCHASING THE GOODS FROM 3 THE OPEN MARKET. THEREFORE, IT WAS QUITE REASONABLE TO MAKE ESTIMATED ADDITIONS OF 12.5% AGAINST THE PURCHASES SO MADE BY THE ASSESSEE. FINDING NO INFIRMITY IN THE IMPUGNED ORDER, WE DISM ISS THE APPEAL. 6. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 05 TH JULY, 2021 SD/- SD/- (AMARJIT SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 05/07/2021 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !#% / THE APPELLANT 2. &'#% / THE RESPONDENT 3. - ( ! ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./& 0 , ! 0 , / DR, ITAT, MUMBAI 6. /123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.