ASST CIT 22(1), MUMBAI vs. M/S AMOLRAJ PRINTERS , MUMBAI

Briefly stated the facts are that, the assessee engaged in the business of offset printing and allied activities, trading in printing machinery and parts, filed return of income for the A.Y.2011-12 on (A.Y: 2011-12) M/s. Amolraj Printers 29.09.2011 declaring income of ₹.20,90,468/- and the return was processed u/s. 143(1) of the Act. Subsequently, Assessing Officer received information from the Sales Tax Department, Mumbai about the accommodation entries provided by various dealers and assessee was also one of the beneficiary from those dealers. The assessment was reopened U/s. 147 of the Act based on the information received from Sales Tax Department, Mumbai, that the assessee has availed accommodation entries from M/s. Liberty Trading Corporation who is said to be providing accommodation entries without there being transportation of any goods. In the reassessment proceedings, the assessee was required to prove the genuineness of the purchases made from M/s. Liberty Trading Corporation. Assessee furnished details of purchases from M/s. Liberty Trading Corporation of ₹.92,663/- and bank statements reflecting payment made through banking channels submitted that the transactions are genuine. Assessee further submitted that the payments are made through account payee cheques as such contended that all the purchases are genuine.

Not convinced with the submissions of the assessee the Assessing Officer treated the purchases as non-genuine and he was of the opinion that assessee had obtained only accommodation entries without there being any transportation of materials and the assessee might have made

Ld. Counsel for the assessee supported the order of the Ld.CIT(A) and submitted to uphold the order of the Ld.CIT(A).

Ld. DR vehemently supported the orders of the Assessing Officer.

Heard both sides, perused the orders of the authorities below. On a perusal of the order of the Ld.CIT(A), we find that the Ld.CIT(A) considered this aspect of the matter elaborately with reference to the submissions of the assessee and the averments in the Assessment Order and restricted the disallowance to 25% of the non-genuine purchases of ₹.92,663/-, while holding so, the Ld.CIT(A) observed as under: - “12. I have carefully gone through the findings given in the assessment order and the written submissions of the appellant on the issue and material available on record. As the facts and (A.Y: 2011-12) M/s. Amolraj Printers issue involved during the AY 2011-12 are same as in AY 2010- 11, my findings in appeal for AY 2010-11 is also applicable to the present appeal for Ay 2011-12. Therefore, I am of the view that 25% disallowance out of purchase of Rs. 92,663/-will meet the ends of justice. In view of above, disallowance @ 25% % of purchase of Rs. 92,6637- = Rs. 23,166/- is hereby sustained and balance disallowance being 75% of Rs.92,663/- = Rs.69,497/- is hereby deleted. The grounds of appeal on merits are partly allowed.”

In the result, appeal of the Revenue is dismissed.