M/S. PORTFOLIO FASHIONS PVT LTD.,MUMBAI vs. CIT (A), DELHI

ITA 1241/MUM/2023Status: DisposedITAT Mumbai25 October 2023AY 2013-1414 pages
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What did the Tribunal hold?

The Tribunal held that the assessee primarily earned commission income from consignment sales and had squared up purchases and sales in its books as per VAT requirements. The AO's addition on account of purchase returns was not accepted as the assessee was not the owner of the goods.

What were the facts?

The assessee, a fashion trading company, declared NIL income after set-off of losses. The Assessing Officer (AO) made an addition on account of purchase returns, alleging suppression of profits due to incorrect valuation of closing stock. The assessee argued that these were consignment transactions and the accounting treatment was for VAT purposes.

What were the issues?

Whether the AO was justified in making an addition on account of purchase returns in consignment sales transactions. Whether the assessee's accounting treatment for VAT purposes led to suppression of taxable profits.

Which sections of the Income-tax Act were involved?

Section 143(3)

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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI

Before: SHRI KULDIP SINGH, HONBLE & SHRI S. RIFAUR RAHMAN, HONBLEDr. G. Deshmukh Marg Shri Hiro Rai Shri H.M. Bhatt

For Appellant: Shri Hiro Rai
For Respondent: Shri H.M. Bhatt
Pronounced: 25.10.2023

PER S. RIFAUR RAHMAN (AM)

1.

This appeal is filed by the assessee against order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] dated 17.02.2023 for the A.Y.2013-14. M/s. Portfolio Fashions Pvt. Ltd.,

2.

Brief facts of the case are, assessee filed its return of income for the A.Y. 2013-14 on 30.09.2013 declaring NIL (after set off of brought forward losses). The case was selected for scrutiny and the notices u/s.143(2) and 142(1) of Income-tax Act, 1961 were issued and served on the assessee. In response, Authorised Representative of the assessee attended and submitted the relevant information as called for.

3.

Assessee is

The order continues below.

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