BHARAT TIN WORKS,MUMBAI vs. ADDL CIT RG 20(1), MUMBAI

The assessee is aggrieved by the decision of learned CIT(A) in confirming the disallowance made by the Assessing Officer out of expenses claimed by the assessee.

The assessee is carrying on the business of manufacturing of tin containers and also dealing in boards used for advertisements. During the course of assessment proceedings, the Assessing Officer issued notices u/s. 133(6) of the Act to certain parties, with whom the assessee had business transactions. Notices were not served in respect of three parties, viz., M/s. Basant Trading Co., M/s. Mahavir Roadlines & M/s. Bhandari Packaging. Accordingly, the Assessing Officer treated the transactions entered with these parties as unproved transactions and accordingly disallowed the expenditure

The first party is M/s. Basant Trading Co. and the assessee has purchased “Kota Stone” from this party. Learned Authorised Representative submitted that the assessee had used these Kota stones for carrying out repair works at the premises of the assessee. However, a perusal of the paper book furnished by the assessee would show that the assessee has furnished only bills relating to purchase of Kota stone. Evidences for transportation and usage of the same in the premises of the assessee were not furnished. When these points were put to learned AR, he sought an opportunity to furnish the relevant details to prove the genuineness of purchases. Learned Departmental Representative also submitted that the expenditure could be allowed, if the assessee proves the genuineness of purchase material and use of the same for repair works.

Having heard the parties on this issue, we are of the view that, in the interest of natural justice, the assessee should be provided with one more opportunity to prove the genuineness of the purchases made from M/s Basant Trading Company and use of the same for carrying out repair works. Accordingly we set aside the order passed by learned CIT(A) on this issue and restore the same to the file of the Assessing Officer for fresh consideration.

The next issue relates to payment made to M/s. Mahavir Roadlines. Learned AR invited our attention to the documents furnished by the assessee before the tax authorities, which are placed in the paper book. A perusal of the same shows that the assessee had deducted tax at source from the payment made to M/s. Mahavir Roadlines and also furnished bills issued by that party for transportation, bills for purchase of material and Goods consignment note. We also notice that the proprietor of M/s. Mahavir Roadlines has filed an affidavit confirming the transactions entered with the assessee. We also notice that all the payments have been made through

In respect of purchases from M/s. Bhandari Packaging, we notice that the assessee has purchased certain raw materials and the assessee has furnished copies of bills, goods consignment note and evidence for payment of octroi. We further notice that the payment has been made by the assessee through banking channels. Perusal of the bills issued by M/s. Bhandari Packaging would also show that the assessee has furnished Form No.C required under Sales Tax Act. Under these set of facts, we are of the view that there is no reason to doubt the genuineness of the purchases made from M/s. Bhandari Packaging. Accordingly, we set aside the order of learned CIT(A) on this issue and direct the Assessing Officer to delete the addition.