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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI VIKAS AWASTHY, JM & SHRI S. RIFAUR RAHMAN, AM
M/s Super Tube ITO-17(3)(4), R. No. 123, 1st floor, Corporation, 50, Gphari बिधम/ Mohalla, Ibrahim Aayakar Bhavan, Vs. Rahimtulla Road, Mumbai-400 020 Mumbai-400 003 स्थायीलेखासं./जीआइआरसं./ PAN No. AABFS2484B (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant : Shri Sanjay J. Sethi, DR by प्रत्यथीकीओरसे/Respondentby : None सुनवाईकीतारीख/ : 13.01.2021 Date of Hearing घोषणाकीतारीख / : 18.01.2021 Date of Pronouncement आदेश / O R D E R
Per S. Rifaur Rahman, Accountant Member:
The present Appeal has been filed by the revenue against the order of Ld. Commissioner of Income Tax (Appeals) - 28 in short referred as ‘Ld. CIT(A)’, Mumbai, dated 04.04.19 for Assessment Year (in short AY) 2010-11. M/s Super Tube Corporation 2. At the outset, it is noticed that none appeared on behalf of assessee in spite of calls and even no application for adjournment was moved. On the other hand, Ld. DR is present in the court and is ready with arguments. Therefore, we have decided to proceed with the hearing of the case ex-parte with the assistance of the Ld. DR and the material placed on record.
The brief facts of the case are, assessee filed its return of income for the year under consideration on 27.09.2010 declaring total income at Rs. 60,940/-. The return was processed u/s 143(1) of the Act. Later on, based on the information received from the DGIT(Inv) and Maharashtra Sales Tax Department about the accommodation entries obtained by the assessee. Accordingly, assessment was reopened u/s 147 of the Act and subsequently assessment was completed u/s 143(3) r.w.s 147 of the Act by the AO thereby making 100% addition on account of information received from Maharashtra Sales Tax Department that assessee has obtained accommodation entries for Rs. 12,89,709/-. Whereas assessee has submitted that it has actually purchased from the alleged parties were only to the extent of Rs. 2,46,288/-. AO treated the difference of information received from Sales Tax M/s Super Tube Corporation Department i.e. 12,89,709/- and purchases recorded by assessee is Rs. 3,46,288/-, disallowed Rs. 9,43,421/- as bogus purchases.
4. Aggrieved by the above order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the submission of assessee, remanded the matter to AO. After considering the assessee’s submission, AO accepted certain mistake in one of the amount of purchases, he reduced the amount of disallowance to the extent of Rs. 8,58,416/-. Ld. CIT(A) after considering the remand report and cross objection of assessee, he came to conclusion that assessee has actually claimed the purchases only to the extent of Rs. 3,46,288/- and AO has received information about bogus purchases of Rs. 12,89,209/- from Sales Tax Department, but AO cannot disallow something, which assessee has not claimed as deduction. Accordingly, Ld. CIT(A) deleted the addition.
Now before us, the revenue has preferred appeal by raising the grounds of appeal as under:-
1. "Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) justified in allowing the addition made by A.O. of Rs. 8,58,4167-u/s. 69C on M/s Super Tube Corporation account of Unexplained expenditure, ignoring that the notice U/s. 133(6), issued by Assessing Officer to the alleged suppliers, were returned un served and the assessee was also unable to prove the genuineness of the purchases withier by producing the suppliers for examination or by furnishing other substantiating documents which were required by the Assessing Officer.?"
2. "Whether on the facts and circumstances of the case and in law, the learned CIT (A) erred in overlooking the fact that the addition made by the AO was based on details of the scam unearthed by the Sales Tax Department, wherein it was established that the assessee has taken mere accommodation entries/bogus bills from the suppliers without actually making purchases from them?"
(This case falls under the exception 10(e) of the circular no. 03/2018 dated 1 1 .07.201 8 as amended on 20.08.201 8.)
3. "The appellant prays that the order of the CIT (A) on the above grounds be set aside and that of AO be restored."
"The appellant craves leave to amend or alter any ground or add a new ground which may be necessary."
M/s Super Tube Corporation The Appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the Assessing Officer be restored.
Considered the submission of Ld. DR and material placed on record. We are of the considered view that the assessee actually purchased and claimed the amount in its books of account to the extent of Rs. 3,46,288/- only. No doubt, AO has received information from Sales Tax Department that assessee has indulged in accommodation entries to the extent of Rs. 12,89,709/-. Mere information from outside agency will not suffice, it should be the amount which assessee must have claimed as deduction in the books of account. In the given case, we notice that assessee has actually claimed deduction only to the extent of purchases recorded by it in its books of account and also certified by the statutory auditor. Therefore, AO has not brought on record any proof that assessee has claimed more than what it had claimed in their books of account. Therefore, we are inclined to accept the findings of Ld. CIT(A). Accordingly, grounds raised by the revenue are dismissed.