ROYAL AIRCON PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER WARD-15(3)(1), MUMBAI

It is relevant to observe, these appeals were disposed off earlier by the Tribunal vide order dated 18th December 2017, in absence of the assessee. Subsequently, upon considering the Misc. Applications filed by the assessee vide M.A. no.298 and 299/Mum./ 2018, the Tribunal in its order dated 13th December 2018, recalled the appeal order passed earlier. Therefore, the appeals have been again posted for hearing before us.

Brief facts are, the assessee, a domestic company, is engaged in manufacturing of parts used in air conditioner. For the impugned assessment years, the assessee filed its return of income in regular course under section 139 of the Income–tax Act, 1961 (for short "the Act"). The returns of income filed by the assessee were initially processed under section 143(1) of the Act. Subsequently, on the basis of information obtained from the Sales Tax Department, Government of Maharashtra that purchases worth ` 34,93,398, in the assessment year 2010–11 and ` 84,01,275, in assessment year 2011–12, were non–genuine, as such purchases were effected from hawala operators

The assessee challenged the aforesaid additions before the learned Commissioner (Appeals). However, learned Commissioner (Appeals) confirmed the additions made by the Assessing Officer.

Though, in ground no.1 in both the appeals, the assessee has challenged the validity of re–opening of assessment under section 147 of the Act, however, at the time of hearing of appeals before us, learned Authorised Representative did not press these grounds. Accordingly, ground no.1 in both the appeals are dismissed as not pressed. Ground no. 4 in both the appeals being general in nature does not require adjudication.

In grounds no.2 and 3 of both the appeals, the assessee has challenged the quantum of addition made @ 15% of the non–genuine purchases.

The learned Authorised Representative submitted before us, under identical facts and circumstances in assessee’s own case for the assessment year 2012–13, the Tribunal has restricted the addition to 8% of the non–genuine purchases. Thus, he submitted, in the impugned assessment years also, the additions should be restricted to 8% of the alleged non–genuine purchases.

The learned Departmental Representative relied upon the observations of learned Commissioner (Appeals) and the Assessing Officer.

We have considered rival submissions and perused material on record. The dispute in the present appeals is confined to the quantum of addition made by the Assessing Officer on account of alleged non– genuine purchases. As could be seen from the facts on record, the Assessing Officer has disallowed 15% of the alleged non–genuine purchase. It is seen from record, under identical facts and circumstances in assessee’s own case for assessment year 2012–13, the Assessing Officer disallowed 15% out of the alleged non–genuine purchases. However, while considering assessee’s appeal challenging

In the result, appeal is partly allowed. Order pronounced in the open Court on 18.03.2019