BAJAJ ELECTRICALS LTD, MUMBAI V. DCIT 2(1), MUMBAI

ITA 7485/MUM/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0341 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 15-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: KIRIT R KAMDAR; PARTH ACHWAL LD ARS
• Keywords: Bogus purchase; Capital asset; Depreciation; Reassessment proceedings
• Section: 40A(3); 143(3); 147

Judgement Text

ITA NO 7485/MUM/2014 BAJAJ ELECTRICALS LIMITED ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 7485/MUM/2014 ( / ASSESSMENT YEAR: 2009-10) BAJAJ ELECTRICALS LIMITED 45/47, BOMBAY LIFE BUILDING VEER NARIMAN ROAD FORT, MUMBAI 400 001 / VS. DEPUTY COMMISSIONER OF INCOME TAX 2(1) ROOM NO.570, AAYKAR BHAVAN, M.K.ROAD MUMBAI -400 020 ! ./ ./PAN/GIR NO. AACB-2484-Q ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : KIRIT R.KAMDAR & PARTH ACHWAL, LD. ARS REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 08/08/2017 / DATE OF PRONOUNCEMENT : 16 /08/2017 ITA NO 7485/MUM/2014 BAJAJ ELECTRICALS LIMITED ASSESSMENT YEAR 2009-10 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-4 [CIT(A)], MUMBAI DATED 12/09/2014 AGAIN ST CONFIRMATION OF CERTAIN ADDITIONS. THE GROUND RELATING TO VALIDITY OF REASSESSMENT PROCEEDINGS HAVE BEEN WITHDRAWN DURING HEARING BEFO RE US AND HENCE THE SAME IS DISMISSED IN LIMINE AND THEREFORE, THE ONLY EFFECTIVE GROUNDS OF APPEAL ARE GROUND NO. 2 & 3 WHICH CONTEST ADDITI ON OF RS.1,757/- ON ACCOUNT OF DEPRECIATION AND RS.7,224/- AGAINST CERT AIN BOGUS PURCHASES. 2. BRIEFLY STATED, THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 07/11/2013 WHERE THE INCOME OF THE A SSESSEE WAS DETERMINED AT RS.149,32,66,805/- AFTER CERTAIN ADDI TIONS AS AGAINST RS.149,32,21,630/- DETERMINED U/S 143(3) READ WITH SECTION 154. 3. THE REASSESSMENT PROCEEDINGS WERE INITIATED UPON RECEIPT OF CERTAIN INFORMATION FROM THE SALES TAX DEPARTMENT, MAHARASHTRA REGARDING BOGUS PURCHASES OF RS.45,175/- BEING MADE BY THE ASSESSEE FROM TWO DEALERS AS PER FOLLOWING DETAILS:- I. NIDDHISH IMPEX PVT. LTD. RS.37,951/- II. SHUBHLABH TRADING CO. RS.7224/- THE ASSESSEE EXPLAINED THAT THE PURCHASE OF RS.37,9 51/- PERTAINED TO PURCHASE OF PLYWOOD WHICH WAS CAPITALIZED UNDER THE HEAD FURNITURE & FIXTURES AND AN AMOUNT OF RS.1757/- WAS CLAIMED AS DEPRECIA TION ITA NO 7485/MUM/2014 BAJAJ ELECTRICALS LIMITED ASSESSMENT YEAR 2009-10 3 AGAINST THE SAME. THE PAYMENT THEREOF WAS MADE IN C ASH BY AN EMPLOYEE OF THE COMPANY WHO WAS REIMBURSED LATER ON UPON PRODUCTION OF BILL. SIMILARLY, THE ASSESSEE EXPLAINED THAT IT PURCHASED 321 NUMBERS OF GAS LIGHTERS FROM SHUBHLABH TRADING CO. WHICH WAS DELIVERED AT THE COMPANYS WAREHOUSE AT BHIWANDI. HOWEVER, NOT CONV INCED, LD. AO DISALLOWED THE SAME AND ADDED AN AMOUNT OF RS.37,95 1/- U/S 40A(3) & RS.7,224/- AGAINST BOGUS PURCHASES. 4. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 12/09/2 014 WHERE LD. CIT(A) RESTRICTED THE ADDITION OF RS.37,951/- TO RS .1,757/-, BEING DEPRECIATION CLAIMED BY THE ASSESSEE DURING IMPUGNE D AY ON FURNITURE & FIXTURE BUT CONFIRMED THE OTHER ADDITION. AGGRIEVED, THE AS SESSEE IS IN APPEAL BEFORE US. 5. THE LD. REPRESENTATIVE FOR ASSESSEE [AR], WHILE DRAWING OUR ATTENTION TO DOCUMENTS PLACED IN THE PAPER BOOK , CONTENDED THAT THE ASSESSEE PURCHASED PLYWOOD FROM NIDDHISH IMPEX PVT. LTD. VIDE BILL NOS. 558 & 559 BOTH DATED 05/02/2009, THE PAYMENT O F WHICH WAS MADE IN CASH BY AN EMPLOYEE WHO WAS REIMBURSED LATER ON FOR THE SAME AND HENCE, IT WAS NOT POSSIBLE TO PRODUCE THE SUPPLIER. OUR ATTENTION WAS DRAWN TO THE FACT THAT THE ASSESSEE GOT W ARDROBE MANUFACTURED FOR ONE OF ITS EMPLOYEE OUT OF THE SAID PLYWOOD AGAINST LAB OR BILL FOR RS.12,050/- AND THE SAME WAS TREATED AS PERQUISITES IN THE HANDS OF THE EMPLOYEE AND DUE TDS WAS DEDUCTED THEREUPON. THEREFORE, THER E WAS NO OCCASION TO CONSIDER THE SAME AS BOGUS PURCHASE. IT WAS FURTHER SUBMITTED THAT THE PROVISIONS OF SECTION 40A(3) DO NOT APPLY TO CASH ITA NO 7485/MUM/2014 BAJAJ ELECTRICALS LIMITED ASSESSMENT YEAR 2009-10 4 PAYMENT TOWARDS PURCHASE OF CAPITAL ASSET IN VIEW O F CBDT CIRCULAR NO. 34 DATED 05/03/1970 . REGARDING ADDITION, ON ACCOUNT OF PURCHASE OF 321 NUMBERS OF GAS LIGHTERS FOR RS.7,224/-, IT WAS SUBM ITTED THAT THE LIGHTERS WERE PROCURED AND DISTRIBUTED AS SAMPLES OVER ASSES SEES VARIOUS LOCATIONS AS SUPPORTED BY BRANCH TRANSFER INVOICES PLACED IN THE PAPER BOOK . IT IS FURTHER CONTENDED THAT THE PAYMENT WAS THRO UGH BANKING CHANNELS AGAINST WHICH BANK STATEMENT HAS BEEN PLAC ED ON RECORD. PER CONTRA, LD. DR PLACED RELIANCE ON THE STAND OF LD. AO. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED RELE VANT MATERIAL ON RECORD. WE FIND STRENGTH IN THE VARIOUS ARGUMENTS R AISED BY LD. AR SINCE THE SAME ARE DULY SUPPORTED BY THE DOCUMENTS PLACED IN THE PAPER BOOK. A PERUSAL OF THE DOCUMENTS REVEALS THAT THE ASSESS EE HAS PURCHASED PLYWOOD OF DIFFERENT SIZES TO MANUFACTURE A WARDROBE WHICH IS DULY SUPPORTED BY THE LABOR BILL . FURTHER, THE SAME HAS BEEN TREATED AS PERQUISITE IN THE HANDS OF AN EMPLOYEE OF THE COMPA NY AND APPLICABLE TDS HAS BEEN DEDUCTED THEREUPON. SIMILARLY, THE GAS LIGHTERS HAVE BEEN DISPATCHED BY THE ASSESSEE TO ITS VARIOUS LOCATIONS AS PER BRANCH TRANSFER INVOICES. THEREFORE, WE ARE INCLINED TO DELETE THE IMPUGNED ADDITIONS. 7. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 16 . 08.2017 SR.PS:- THIRUMALESH ITA NO 7485/MUM/2014 BAJAJ ELECTRICALS LIMITED ASSESSMENT YEAR 2009-10 5 / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. $'. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI