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TMI Blog2020 (11) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon Judgment and Order since the issues involved in both these Appeals are identical. 3. The learned Counsel for the parties, however, submit that Tax Appeal No.22/2016 may be treated as a lead Appeal. 4. This Appeal was admitted on 5th March 2019 on the following substantial questions of law. "1. Whether the Income Tax Appellate Tribunal erred in law upholding the disallowance to the extent of Rs. 65,000/- only and deleting the balance addition of Rs. 24,06,566/- u/s 14A ? 2. Whether the Income Tax Appellate Tribunal erred in law upholding the order of Commissioner of Income Tax(A), in disallowing cash purchases without considering that onus is upon the assessee to prove the genuineness thereof? 3. Whether the Income Tax Appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , have reduced this disallowance to only Rs. 65,000/-, which is not proper. 7. Mr. Jain defends the orders made by the Commissioner (Appeals) and the ITAT based on the reasoning reflected therein. He points out that the total dividend income was only Rs. 45,321/-. He relies on Nirved Traders Pvt. Ltd. vs. Dy. Commissioner of Income Tax (2019) 3 NYPCTR 411 (Bom), to submit that disallowance under Section14A cannot be more than the exempt income earned by the Assessee during the relevant assessment year. 8. Rival contentions now fall for our determination. 9. There is no perversity in the orders passed by the Commissioner (Appeals) and the ITAT on this issue. Besides in Nirved Traders Pvt. Ltd. ( supra), this Court has held that disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion in Shree Choudhary Transport Co. (supra) is not at all relevant to the issue in this matter. 12. On consideration of the rival contentions, again we are unable to agree with the contentions of Ms. Razaq. The record indicates that the total purchases of the Assessees during the relevant assessment year were in the range of Rs. 29.97 crores. As against this, cash purchases were of Rs. 60,20,080/- which corresponds to around 2% of the total purchases. The purchases were in a series of transactions, involving an amount of less than Rs. 20,000/-. This is not a case where the books of account of the Assessees were rejected by the AO. The record also establishes that the Assessees obtained 'H' Form concerning these purchases. 13. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival contentions, again, we find no good ground to interfere with the view taken by the Commissioner (Appeals) as also the ITAT on this issue. In the first place, the ITAT for the Assessment Year 2009-10 in respect of these very Assessees, has confirmed the deletion of a similar nature, relying upon a decision of this Court in Chase Bright Steel Ltd. (supra). Admittedly, this order of the Tribunal was never challenged by the Revenue, and the view taken therein was accepted. Though indeed, the principle of res judicata will not be attracted in such matters, it is clear that in similar circumstances and overlapping facts, the view of the Tribunal was never questioned by the Revenue concerning these very Assessees. Accordingly, there is no cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndervaluation of closing stock. 24. Again, on consideration of the rival contentions, we detect neither any perversity in the concurrent findings of fact recorded by the Commissioner (Appeals) and the ITAT, nor can we say that the two authorities misconstrued the legal position in this regard. The Revenue, on one hand, cannot accept rendering of service as genuine and tax the transactions based on the same and the other hand, urge that there has been undervaluation of the closing stock and on such basis make additions to the returned income. Accordingly, even the fourth substantial question of law is required to be answered against the Revenue and in favour of the Assessees. 25. Ms. Razaq finally contends that the Commissioner (Appeals) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue during the assessment of M/s. Karishma Global Mineral Exports Pvt. Ltd. even though such assessment was completed under Section 143(3) of the IT Act. Therefore, there was a factual error on the part of the AO in holding that the sisterconcern was never involved in this type of activity. 29. Secondly, we are satisfied that both Commissioner (Appeals) and the ITAT did scrutinize the transaction with required care and caution and only thereafter recorded the concurrent findings of fact. Therefore, even the fifth substantial question of law is required to be answered against the Revenue and in favour of the Assessees. 30. As a result, the substantial questions of law in these Appeals are required to be answered against the Revenue and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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