Case Law Details
Sonicwall Technology System India Pvt. Ltd. Vs ACIT (ITAT Mumbai)
During the year, the assessee incurred marketing expenditure of Rs. 2,17,52,924 which was debited to the profit and loss The said payment was made by the assessee to 17 entities in respect of various events conducted during the year. In order to determine the genuineness of the payment made by the assessee, the AO issued notices under section 133(6) of the Act. However, only 2 parties namely, M/s EIH Ltd and The Lalit Golf and Spa Resort failed to respond to the aforesaid notice. In order to substantiate the genuineness of the payment to these 2 entities, the assessee furnished the bank account statement, which reflected the payment made to these parties, invoices raised by these entities to the assessee, details of tax deducted on payment made to these parties, PAN No. and complete address. It is no doubt true that payment through the bank channel is not conclusive proof of the transaction. However, at the same time, when the assessee has provided all the information available with it regarding the transaction, merely on the basis that the entity has not responded to notice issued under section 133 (6) of the Act the transaction cannot be doubted and be treated as non-genuine, particularly when the same has been entered into with entities which are well-known Hotel chains in India. It is also not the claim of the Revenue that these entities are not in existence or the documents furnished by the assessee are bogus. Thus, in the peculiar facts of the case, we find no basis in upholding the addition by the AO merely on the basis that only 2 out of 17 parties failed to respond to the notice issued under section 133(6) of the Act. Accordingly, we direct the AO to delete the addition of Rs. 22,43,401.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been filed by the assessee challenging the impugned order dated 01/03/2019, passed under section 250, of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals)–24, Mumbai, [“learned CIT(A)”], for the assessment year 2015–16.
2. In its appeal, the assessee has raised the following grounds:–
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