ACIT Vs Chalet Hotels Ltd (ITAT Mumbai)
ITAT Mumbai held that the assessee had furnished sufficient evidences to justify the genuineness of the payments and therefore their mere non-attendance of summons, cannot be reason enough to disbelieve the genuineness of the transactions with them. Accordingly, addition u/s. 69C deleted.
Facts- Revenue has preferred the present appeal contesting against action of Ld. CIT(A) in deleting the addition made towards unexplained expenditure u/s. 69C of the Income Tax Act.
Revenue is contesting against the action of the Ld. CIT(A) in deleting the disallowance made by the AO under Section 14A of the Act in accordance with Rule 8D both while computing income under normal provisions and book profit u/s 11 5JB of the Act.
Conclusion- Hon’ble Bombay High Court in CIT Vs. Nikunj Eximp Enterprises Pvt. Ltd. has held that, merely because the suppliers had not appeared before the Assessing Officer or the CIT(A), one could not conclude that the purchases were not genuine. The assessee has brought on record sufficient evidences to substantiate the genuineness of the purchases and therefore nonattendance of summons cannot be the sole reason to disallow the purchases.
Held that the assessee/vendors had furnished sufficient evidences to justify the genuineness of the payments and therefore their mere non-attendance of summons, cannot be reason enough to disbelieve the genuineness of the transactions with them.
Held that the assessee did not earn any exempt income during the relevant year, we uphold the action of Ld. CIT(A) deleting the disallowance made by the AO under Section 14A of the Act, both while computing income under normal provisions and book profit u/s 11 5JB of the Act. Accordingly these grounds of the Revenue are dismissed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These are cross appeals preferred by the assessee and the Revenue against the following orders of the Ld. Commissioner of Income Tax (Appeals)-52, Mumbai [in short ‘CIT(A)’].
