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

Briefly the facts are, the 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 declaring 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 been identified to be providing accommodation bills without effecting real transaction, the Assessing Officer reopened 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 the 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 with the aforesaid decision of learned Commissioner (Appeals), both the assessee and revenue are before us.