PAREKH MARKETING LIMITED,MUMBAI V. DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 1(2)(1), MUMBAI, MUMBAI

ITA 376/MUM/2025

AI Insights

The case involves Parekh Marketing Limited appealing against the decisions of the CIT(A)-NFAC, which confirmed disallowances made by the Assessing Officer (AO) for the Assessment Year 1998-99. The disallowances pertained to gift items treated as bogus purchases, reimbursement of expenses to C&F agents, and service charges paid to M/s. Chimanlal Agencies. The appellant argued that the CIT(A)-NFAC did not follow the ITAT's previous directions and failed to consider the evidence and submissions provided. The ITAT found that the CIT(A)-NFAC did not adequately address the appellant's arguments or provide a reasoned decision, leading to the remittance of the issues back to the CIT(A)-NFAC for a comprehensive review.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312399 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 1998-1999
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: H.M. BHATT
• Assessee Lawyers: DEEPAK JAIN
• Keywords: Corroborative evidences; Bogus purchase; Gift; Bogus
• Section: 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “C” Bench, Mumbai. Before Shri Sandeep Gosain (JM) & Shri Omkareshwar Chidara (AM) ITA No. 376/MUM/2025 (Assessment Year : 1998-99) Parekh Marketing Limited 2nd Floor, Mafatlal House Backbay Reclamation Mumbai-400 020. Vs. DCIT-1(2)(1) Room No. 535 Aayakar Bhavan, M.K. Road,Mumbai-400 020 PAN : AAACP7917J Appellant Respondent Assessee by : Shri Deepak Jain Revenue by : Shri H.M. Bhatt Date of Hearing : 17/04/2025 Date of pronouncement : 30/04/2025 O R D E R Per Omkareshwar Chidara (AM) :- The appellant filed this appeal for A.Y. 1998-99 and raised following grounds of appeal :- A. DISALLOWANCE OF GIFT ITEMS TREATED AS BOGUS PURCHASES: 1. On the facts and in the circumstances of the case and in law, the Learned National Faceless Appeal Centre, Delhi/Commissioner of Income- tax (Appeals) (\"NFAC\") erred in not following the directions of the Hon'ble Income-tax Appellate Tribunal, Mumbai (\"ITAT\") given vide Order dated 10.02.2009 and confirming the disallowance of Rs. 7,78.929 by treating reimbursement for gift Hems as bogus purchases as treated by the Assessing Officer and without appreciating the submissions and evidences filed by the Appellant and without following the orders of the C1T(A)-X1V, Mumbai in the Appellant's own case for A.Ys. 1995-96, 1996-97 and 1997-98. The Appellant submits that the disallowance of the said expenses as bogus expenses is incorrect and the same ought to be deleted. B. DISALLOWANCE OF REIMBURSEMENT OF EXPENSES OF RS. 12,20,438: 2. On the facts and in the circumstances of the case and in law, the Learned NFAC erred in not following the directions of the Hon'ble ITAT given vide Order dated 10.02.2009 and confirming the disallowance of Parekh Marketing Limited 2 Rs. 12,20,438 in relation to reimbursement of expenses to C&F agents and without appreciating the fact that: a. All the evidences were filed by the Appellant before the NFAC b. the parties to whom the notice u/s. 133(6) of the Income-tax Act, 1961 (\"the Act\") was issued had duly complied the notices and accordingly, the onus was discharged by the Appellant c. Similar expenses has been claimed in all the earlier and subsequent years and the same has been accepted by the Assessing Officer The Appellant submits that the disallowance of the said expenses is incorrect and the same ought to be deleted. C. DISALLOWANCE OF SERVICE CHARGES OF RS 1,61,213: 3. On the facts and in the circumstances of the case and in law, the Learned NFAC erred in not following the directions of the Hon’ble ITAT given vide Order dated 10.02.2009 and confirming the disallowance of Rs. 1,61,213/- paid to M/s. Chimanlal Agencies without appreciating the submissions and evidences filed by the Appellant and without appreciating the fact that a. The confirmation of services charges received by M/s. Chirnanlal Agencies was furnished by the Appellant b. the Appellant had claimed the similar expense in all the earlier and subsequent years and the same has been accepted by the Assessing Officer The Appellant submits that the disallowance of the said expenses is incorrect and the same ought to be deleted. 2. From the above grounds of appeal, it is observed that in the first round of appeal, the Hon'ble ITAT has remitted all these issues for fresh consideration by Ld. CIT(A) as the additions were made without supporting evidences and proper material was not brought on record by Ld. CIT(A) to sustain the additions made by the Ld. AO. 3. The Ld. AR of the appellant has pointed out before this Bench the fact that the Ld. CIT(A)-NFAC has called for a remand report from the Ld. AO on all these issues and as report was not received, this Ld. CIT(A)-NAFC has simply reproduced the findings of Ld. AO, Ld. CIT(A) and order of ITAT during the first round of appeal and again confirmed all the additions made by Ld. AO. The Ld. CIT(A) has not taken into consideration the arguments Parekh Marketing Limited 3 made by the appellant and simply confirmed the additions by saying that there is no infirmity in the order of Ld. AO. The order of Ld. CIT(A)-NAFC is not a speaking order and when the ITAT gave certain directions to Ld. CIT(A), the same should have been carried out and a speaking order should have been passed after taking into consideration all the arguments of appellant. The Ld. CIT(A)-NAFC cannot be very casual and pass the orders without giving cogent reasons, especially when the ITAT has directed the first appellate authority to do so. A copy of detailed submissions made before Ld. CIT(A)-NAFC was also filed before the Bench. 4. As the order of Ld. CIT(A) is without any reasoning and without taking into cognizance the arguments submitted by the appellant, he is directed to pass an order afresh after taking all the material produced before him and pass a reasoned and speaking order 5. With the above observations, all the issues are remitted back to the file of Ld. CIT(A). 6. The appellant’s appeal is allowed for statistical purposes. Order pronounced in the open Court on 30/04/2025. Sd/- Sd/- (SANDEEP GOSAIN) (OMKARESHWAR CHIDARA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 30/04/2025 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai "