M/S.MEDICURE CHEMIST,MUMBAI vs. JT CIT RANGE-26(2), MUMBAI

The issue raised is that the learned CIT(A) erred in upholding the disallowance of `99,936/- on account of purchase held to be bogus.

The brief facts of the case are that the assessee has made the aforesaid purchases and debited the same to Furniture & Fixtures and claimed depreciation of `4,997/- only. Upon holding the purchases to be bogus the entire amount of `99,936/- was disallowed and added to the income of the assessee.

Against this order the assessee had appealed before us. Upon hearing both the Counsels and perusing the records, we find that when the claim in the Profit & Loss Account was only a debit of `4,997/- on account of depreciation there was no justification whatsoever of disallowing and M/s. Medicure Chemist adding the sum of `99,936/- debited to Furniture and Fixtures as addition to the Profit & Loss Account.

In this view of the matter we modify the order of the authorities below and hold that the disallowance should be restricted to the claim of depreciation of `4,997/- on the purchases of fixed assets held to be bogus.

In the result this appeal filed by the assessee stands partly allowed.