M/S ELCOME MARINE SERVICES PVT LTD. NOW KNOWN INTERGRATED SYSTEMS PVT LTD, MUMBAI V. ACIT 6(2)(2), MUMBI

ITA 7799/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0135 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 18-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Assessee Lawyers: ASHOK PURI
• Section: 147; 12; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER ITA NO. 7799/MUM/2019 ASSESSMENT Y EAR: 2010 - 11 M/S ELCOME MARINE SERVICES PVT. LTD., (NOW KNOWN AS ELCOME INTEGRATED SYSTEMS PVT. LTD.), G - 3, ARIHANT BUILDING AHMEDABAD STREET, CARNAC BUNDER, MUMBAI - 400009 PAN: AAACE1240M VS. ACIT - 6(2)(2), INCOME TAX OFFICE, AAYAKAR BHAVAN, MAHARISHI KARVE ROAD MUMBAI - 400020 (APPELLANT) (RESPONDENT) ITA NO. 198 /MUM/2020 ASSESSMENT Y EAR: 2010 - 11 DY. COMMISSIONER OF INCOME TAX 6(2)(2), ROOM NO. 504, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S ELCOME MARINE SERVICES PVT. LTD., (NOW KNOWN AS ELCOME INTEGRATED SYSTEMS PVT. LTD.), G - 3, ARIHANT BUILDING A HMEDABAD STREET, CARNAC BUNDER, MUMBAI - 400009 PAN: AAACE1240M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK PURI (AR ) REVENUE BY : SHRI VIJAY KUMAR MENON ( DR ) DATE OF HEARING: 23 /06 /20 21 DATE O F PRONOUNCEMENT: 09 / 07 /202 1 2 ITA NO S . 7799 / MUM/2019 & ITA NO. 198/MUM/2020 ASSE SSMENT YEAR: 20 10 - 11 O R D E R PER SAKTIJIT DEY , JM CAPTIONED CROSS APPEALS ARISE OUT OF ORDER DATED 24.09.2019 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 12 , MUMBAI, FOR THE ASSESSMENT YEAR 2010 - 11. 2. BRIEFLY THE FACTS ARE, TH E ASSESSEE IS A RESIDENT COMPANY AND IS STATED TO BE ENGAGED IN THE BUSINESS OF SALES AND SERVICING OF ELECTRONIC NAVIGATIONAL AND COMMUNICATION EQUIPMENT. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 13.10.2010 DECLARI NG TOTAL INCOME OF RS. 10,59,22,253/ - . SUBSEQUENTLY, BASED ON INFORMATION RECEIVED FROM SALES TAX DEPARTMENT THROUGH DGIT (INV.), MUMBAI THAT THE PURCHASES SHOWN BY THE ASSESSEE WORTH RS. 20,98,613/ - ARE NON - GENUINE AS THE CONCERNED SELLING DEALERS HAVE BE EN IDENTIFIED TO BE PROVIDI NG ACCOMMODATION BILLS WITHOUT EFFECTING REAL TRANSACTION, T HE ASSESSING OFFICER REOPEN ED THE ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT , 1961 . IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES. THOUGH, THE ASSESSEE FURNISHED SOME DOCUMENTARY EVIDENCES, HOWEVER, THE AO WAS NOT SATISFIED. ACCORDINGLY, HE DISALLOWED THE PURCHASES OF RS. 20,98,613/ - AND ADDED BACK TO THE INCOME OF THE ASSESSEE. ASSESSEE CONTESTED TH E AFORESAID ADDITION BEFORE LEARNED COMMISSIONER (APPEALS). PARTLY ACCEPTING THE SUBMISSIONS OF THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON - GENUINE PURCHASES. BEING AGGRIEVED WI TH THE AFORESAID DECIS ION OF LEARNED COMMISSIONER (APPEALS) , BOTH THE ASSESSEE AND REVENUE ARE BEFORE US. 3. AT THE OUTSET, LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED , WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2009 - 10, T HE TRIBUN AL HAS RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON - GENUINE PURCHASES. HE ALSO RELIED UPON THE DECISION OF THE TRIBUNAL IN CASE OF INDOCEN ELECTRONIC SYSTEM PVT. LTD. VS. ACIT, ITA NO. 4345 AND 5845/MUM/2018, WHEREIN THE TRIBUNAL WHILE DECIDING IDENTICAL ISSUE HAS 3 ITA NO S . 7799 / MUM/2019 & ITA NO. 198/MUM/2020 ASSE SSMENT YEAR: 20 10 - 11 UPHELD THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE DISALLOWANCE TO 12.5%. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON TH E OBSERVATIONS OF THE AO AND LEARNED COMMISSIONER (APPEALS). 5. HAVING CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECO RD, W E FIND THAT THOUGH THE AO DISALLOWED THE ENTIRE PURCHASES, HOWEVER, LEARNED COMMISSIONER (APPEALS) HAS RESTRICTED SUCH DISALLOWANCE TO 12.5% , BEING THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES. PERTI NENTLY , WHILE DECIDING IDENTICAL ISSUE IN ASSESSEE S OWN CASE IN ASSESSMENT YEAR 2009 - 10, THE TRIBUNAL, IN ITA NO. 5995/ MUM/2016 DATED 15.09.2017 HAS RESTRICTED THE DISALLOWANCE TO 12.5% OF THE ALLEGED NON - GENUINE PURCHASES. FACTS BEING IDENTICAL , RESPECTF U LLY FOLLOWING THE AFORESAID DECISION OF THE CO - ORDINATE BENC H, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUNDS RAISED , BOTH , BY THE ASSESSEE AND REVENUE ARE DISMISSED. 6 . IN THE RESULT, BOTH THE APPEAL S ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JULY , 2021 . SD/ - SD/ - ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI ; DATED: 09 / 07 /2021 ALINDRA, PS 4 ITA NO S . 7799 / MUM/2019 & ITA NO. 198/MUM/2020 ASSE SSMENT YEAR: 20 10 - 11 / 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 . / BY ORDER, //TRUE COPY// / (DY. /ASSTT. REGISTRAR) , / ITAT, MUMBAI