ACIT CIR-7(3)(2), MUMBAI vs. M/S PRINTLINE REPRODUCTIONS PVT. LTD., MUMBAI

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ITA 2937/MUM/2019Status: DisposedITAT Mumbai15 September 2021AY 2009-105 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s deletion of the disallowance. It noted that the purchases were made on the advice of a contractor and were not for the assessee's own business transactions.

What were the facts?

The Assessing Officer reopened the assessment based on information about accommodation entries and bogus purchases. The AO disallowed purchases of Rs. 1,12,996 as the assessee failed to prove their genuineness and notices to the seller returned unserved.

What were the issues?

Whether the disallowance of purchases made on the advice of a contractor, which were not for the assessee's own business, is justified.

Which sections of the Income-tax Act were involved?

Section 69C,Section 147,Section 143(3),Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI MAHAVIR SINGH & SHRI S. RIFAUR RAHMAN

For Respondent: Shri Bharat Andhale

The present appeal has been filed by the Revenue challenging the order dated 27th February 2019, passed by the learned Commissioner of Income Tax (Appeals)–13, Mumbai, pertaining to the assessment year 2009–10.

2.

When the case was called for hearing, none appeared on behalf of the respondent assessee. There is no application for adjournment either. Therefore, we proceed to dispose off the appeal ex–parte qua

2 M/s. Printline Resproductions P. Ltd. the respondent assessee after hearing the learned Departmental Representative and on the basis of material on record.

3.

The issue raised in the present appeal relates to the relief granted by learned Commissioner (Appeals) in respect of addition of ` 1,12,996, made on account of non–genuine purchases under section 69C of the Income Tax Act, 1961 (for short "the Act").

Brief facts are, the assessee has filed its return of income on 31st 4. August 2009, declaring total loss at ` (58,57,410) and the Assessing Officer completed the assessment under section 143(3) of the Act determining a total loss of ` (58,57,410). Subsequently, on the basis of information received from the DGIT (Inv.), Sales Tax Department, Government of Maharashtra, indicating that the assessee is a beneficiary of accommodation entries provided by hawala operators through bogus purchase bills, the Assessing Officer re–opened the assessment under section 147 of the Act. During the assessment proceedings, the Assessing Officer called upon the assessee to prove the genuineness of purchases worth ` 1,12,996, claimed to have been made during the year from M/s Mahavir Traders. Further, to independently verify the genuineness of such purchases, the Assessing Officer issued notices under section 133(6) of the Act to the selling dealers calling for certain information. However, all such notices

3 M/s. Printline Resproductions P. Ltd. returned back un–served. Further, the Assessing Officer was not satisfied with the evidences furnished by the assessee to establish the genuineness of purchases. Thus, ultimately, the Assessing Officer disallowed the entire amount of ` 1,12,996, and added it to the income of the assessee.

5.

After considering the submissions of the assessee in the context of facts and material on record, the learned CIT(A) deleted the disallowance on account of bogus purchase made by the Assessing Officer by observing as follows:–

6.

Before me, the learned Departmental Representative strongly relied upon the observations of the Assessing Officer and submitted that the assessee having failed to prove the genuineness of purchases, the entire amount representing such purchases has to be added.

7.

Having considered the submissions of the learned Departmental Representative, we find that, though, the assessee may not have been able to prove the genuineness of purchases from the declared source since the third party work contractor purchased these goods. However, it is a fact on record that the Assessing Officer has not disputed the above fact and the assessee has made payment to the party based on the advise of the contractor. Therefore, it goes to prove that the assessee must have purchased goods on the advise of the contractor.

4 M/s. Printline Resproductions P. Ltd.

In such circumstances, it is observed that the electrical goods purchased by the assessee are not for its own business transaction. As these purchases are not relevant for the assessee’s business, therefore, keeping in view the above facts on record, the decision of the learned CIT(A) to delete the entire amount of ` 1,12,996, on account of alleged bogus purchase is fair and reasonable requiring no interference from this forum. Accordingly, we uphold the order of the learned CIT(A) by dismissing the grounds raised by the Revenue.

8.

In the result, Revenue’s appeal stands dismissed. Order pronounced in the open Court on 15.9.21

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