ASST CIT 31 (1), MUMBAI V. M/S HITECH WRITING INSTRUMENTS , MUMBAI

ITA 7552/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1813 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIDD ARAMAP P A
• Keywords: Corroborative evidences; Accommodation entries
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY , J UDICIAL M EMBER ITA NO. 7552 /MUM/2019 ASSESSMENT Y EAR: 2009 - 10 ASST. COMMISSIONER OF INCOME TAX 31 (1), ROOM NO. 602, 6 TH FLOOR, KAUTILY A BHAWAN, B.K.C. BANDRA (E), MUBMAI - 400051 VS. M/S HITECH WRITING INSTRUMENTS, 17/18, SHAKTI INDUSTRIAL ESTATE, PIRAMAL NAGAR, S. V. ROAD, GOREGAON (WEST), MUMBAI - 400062 PAN: AAAFH0518A (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHIDDARAM A P P A (DR) ASSESSEE BY : HEMANT SHARMA (AR) DATE OF HEARING : 24 /05 /202 1 DATE OF PRONOUNCEMENT: 25 / 0 6 /202 1 O R D E R THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 30.09.2019 OF LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) - 4 2 , MUMBAI FOR THE A SSESSMENT YEAR 2009 - 10 . 2. THE DISPUTE IN THE PRES ENT APPEAL IS CONFINED TO PARTIAL RELIEF GRANTED BY THE LEARNED COMMISSIONER (APPEALS) IN THE MATTER OF ADDITION MADE BECAUSE OF ALLEGED NON - GENUINE PURCHASES. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE MANUFACTURING OF WRITING PEN AND RELATED ITEMS. FOR TH E ASSESSMENT YEA R UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 29.07 .2009 DECLARING TOTAL INCOME OF RS. 7,39,520/ - . SUBSEQUENTLY, BASED ON INFORMATION RECEIVED FROM DGIT (INV.), MUMBAI THAT THE ASSESSEE IS BENEFICIARY OF ACCOMMODATION ENTRIES BY WAY OF NON - GENUINE PURCHASES WORTH RS. 9,03,570/ - , THE ASSESSING OFFICER (AO) REOPEN ED THE ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT , 2 ITA NO. 7552 / MUM/2019 ASSESSMENT YEAR: 20 09 - 1 0 1961 . IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLED UPON THE ASSESSEE TO FURNISH SUPPORTING EVIDENCE TO PROVE THE PURCHASES . A S ALLEGED BY THE AO, THE ASSESSEE COULD NOT FURNISH ITEMS WI SE DAY - TO - DAY STOCK RE GISTER AND SOME OTHER DETAILS CALLED FOR. FURTHER, HE OBSERVED , NOTICE ISSUED UNDER SECTION 133 (6) OF THE ACT TO THE CONCERNED SELLING DEALER SEEKING INFORMATION , RETURNED BACK UN - SERVED. BASED ON THE ABOVE, AO CONCLUDED THAT THE PURC HASES OF RS. 9,03,570/ - ARE NON - GENUINE AND ACCORDINGLY DISALLOWED THEM. THE ASSESSEE CONTESTED THE AFORE SAID DISALLOWANCE BEFORE LEARNED COMMISSIONER (APPEALS) . PARTLY ACCEPTING ASSESSEES CONTENTION, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE DISALLOW ANCE TO 12.5% OF ALLEGED NON - GENUINE PURCHASES. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD . AS RIGHTLY OBSERVED BY LEARNED COMMISSIONER (APPEALS) , THOUGH , THE AO HAS TREATED THE PURCHASES AS NON GENUINE, H OWEVER, H E HAS NOT DOUBTED THE CONSUMPTION AND SALES E FFECTED BY THE ASSESSEE. THUS, LOGICAL CONCLUSION WOULD BE , IN ABSENCE OF THE PURCHASE D GOODS, THE ASSESSEE COULD NOT HAVE CARRIED ON THE MANUFACTURING ACTIVITY AND SOLD THE PRODUCTS. THUS, IN SUCH FACTUAL POSITION , T HE DOUBT , IF ANY , IS ONLY WITH REGARD TO THE SOURCE OF PURCHASES. THAT BEING THE CASE , ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH DOUBTFUL PURCHASES CAN BE CONSIDERED FOR ADDITION. AFTER TAKING NOTE OF THE BUSINESS OF THE ASSESSEE AND OTHER FACTORS, I AM IN AGREEM ENT WITH THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON - GENUINE PURCHASES. GROUNDS ARE DISMISSED. 5 . IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JU NE , 2021 . SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 25 / 06 /202 1 ALINDRA, PS 3 ITA NO. 7552 / MUM/2019 ASSESSMENT YEAR: 20 09 - 1 0 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI