WINSEL AQUAS P.LTD,MUMBAI vs. ASST CIT 11(3)(2), MUMBAI

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ITA 1205/MUM/2017Status: DisposedITAT Mumbai12 January 2018AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the purchases required verification by the AO. The AO was directed to verify the purchases and allow the claim of depreciation as per law.

What were the facts?

The assessee claimed depreciation on purchases made from three parties. The Assessing Officer disallowed the depreciation, suspecting these parties provided accommodation entries and bogus bills. The CIT(A) upheld the disallowance by estimating suppressed profit.

What were the issues?

Whether depreciation on purchases from alleged bogus entities is allowable and whether the matter requires fresh verification by the AO.

Which sections of the Income-tax Act were involved?

Section 143,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI

Before: SHRI D.T. GARASIA & SHRI G. MANJUNATHA

For Appellant: Shri Rakesh Kapoor, A.R
For Respondent: Shri T.A. Khan, D.R
Hearing: 04.12.2017Pronounced: 12.01.2018

Per D.T. GARASIA, Judicial Member:

1.

The present appeal has been preferred by the assessee against the order dated 10.11.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10.

2.

Assessee is a registered company. The assessee company has filed the return of income on 29.09.09 declaring total income at Rs.59,10,967/-. In the assessment proceedings passed under section 2 M/s. Winsel Aquas P. Ltd. 143 read with section 147 the Assessing Officer (hereinafter referred to as the AO) has made the addition on account of disallowance of depreciation of RS.1,80,785/-. The AO has disallowed depreciation on the ground that AO has noticed that Sales Tax Department of Government of Maharashtra has listed names of certain dealers who are providing accommodation entries without doing actual business. The AO noticed that assessee has made above purchase from three parties namely Motion Traders Pvt. Ltd., Shree Trading Corporation & K.K. Trading Company who were providing the bogus bills. Therefore, AO disallowed the depreciation.

3.

Matter carried to the Ld. CIT(A) and the Ld. CIT(A) has also dismissed the appeal by estimating the suppressed profit to the extent of 12.5% of the purchases made from the bogus entities.

4.

We have heard the rival contentions of both the parties. During the course of hearing, the Ld. A.R. submitted that assessee has purchased air conditioner, synthetic waiver tank and Poly Carbonate Jars from these above three companies and assessee has claimed depreciation which was disallowed. The Ld. A.R. submitted that there is no question of disallowing 12.5%, because every expenditure is shown as capital expenditure. Therefore, matter may be restored to AO to decide it afresh.

5.

Ld. D.R. did not object.

3 M/s. Winsel Aquas P. Ltd. 6. Having heard both the parties and looking to the facts and circumstances of the case, we find that assessee has made purchases from above three parties. Therefore, we are of the view that it requires verification at the end of AO. AO is directed to verify and allow the claim of depreciation as per law.

7.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 12.01.2018.

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