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10-01-2020, B4U Television Network, Section 145, 147, Tribunal Mumbai
1. These two appeals are filed by the assessee against different orders of the Ld. Commissioner of Income-tax (Appeals) – 50, Mumbai dated 27.04.2018 for the A.Ys. 2009-10 and 2011-12.
2. In the appeal for the A.Y. 2009-10 assessee challenged the order of the Ld.CIT(A) in upholding the disallowance of purchases made from M/s. Mehul Traders and M/s. Rahul Traders.
3. Briefly stated the facts are that, in the course of the assessment proceedings Assessing Officer noticed that as per the information of investigation wing of the department M/s. Mehul Traders and M/s. RahulTraders were providing accommodation entries and assessee is one of the beneficiary. Assessee was asked to furnish the details with regard to purchases made from M/s. Mehul Traders and M/s. Rahul Traders. Assessee submitted that it had purchased optical fiber cable for ₹.5,09,600/- from M/s. Mehul Traders and the same is capitalised in thebooks of accounts under the head “Furniture and Fixtures” and the Optical fiber cable was used for last mile connectivity between internet service provider and assessee’s office. It was also submitted that assessee claimed deprecation of ₹.25,480/- and therefore it was contended that transactions with M/s.Rahul Traders is not bogus.
4. In so far as the transaction with M/s. Rahul Traders are concerned it was submitted that assessee purchased electrical appliances/fittings for ₹.15,068/-. It was submitted that electrical appliances/fittings were used in its new office premises and the same were capitalised in the books of accounts under the head “Furniture and Fixtures” and claimed depreciation of ₹.741/-. Therefore, it was contended that the transaction with M/s. Rahul Traders are genuine.
5. The Assessing Officer to verify the genuineness of these details deputed Inspector to visit the premises of M/s. Mehul Traders and M/s.Rahul Traders as mentioned in the bills/invoices. The Inspector submitted his report on 19.03.2013 observing that both M/s. Mehul Traders and M/s. Rahul Traders could not be located and no businessactivities were carried on in the given address. It was reported by the Inspector that the address as mentioned in the bills of M/s. Mehul Traders is only a residential premises. Inspector in his report stated that the address on the invoices given by M/s. Rahul Traders is an industrial area and he could not found the address of the M/s. Rahul Traders. Thus, based on the report of the Inspector, Assessing Officer treated the purchases as not verifiable and therefore genuineness of the purchases could not be established. Assessing Officer by observing that no evidences regarding physical delivery of materials such as stock register entry, delivery challans etc., have been produced by the assessee, he disallowed the purchases to the extent of ₹.5,20,033/- made from
M/s.Mehul Traders and M/s. Rahul Traders.
6. On appeal the Ld. CIT(A) though accepted the contention of the Assessing Officer that the purchases were not genuine, the alternative submission of the assessee that since assessee has claimed only depreciation the entire purchases cannot be disal owed has been accepted and accordingly directed the Assessing Officer to sustain the disallowance of depreciation of ₹.26,221/- and deleted the rest of the addition/disallowance.
7. Before us, the Ld. Counsel for the assessee reiterated the submissions made before the lower authorities. Ld. DR vehemently supported the orders of the authorities below.
8. We have heard the rival submissions and perused the orders of the authorities below. On a perusal of the order of the Ld.CIT(A) we find thatLd. CIT(A) held that the genuineness of the purchases is not proved. However, entire purchases cannot be disallowed and only depreciation is to be disallowed as the assessee has capitalised the purchases in its books of accounts and claimed only depreciation observing as under: -