TMI Blog2014 (9) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... Statutory Authorities; coupled with NOC filed for Registration purposes of Mrs. Kamini Gupta conclude the issue against the Revenue in the absence of any rebuttal on facts and evidence. Availability of go-down facilities – Held that:- Nothing has been placed to show that the person was closely linked either to Kumar Ice Factory or M/s Padmesh Realtors and on the contrary has consistently been described as a stranger by the assessee who has instead placed on record before the AO the correct address of M/s Kumar Ice Factory who had 2000 square meters of area which was allowed by the owner to be used as godown by M/s Padmesh Realtors for their storage of material - the statement of an unconcerned person and enquiry at the wrong address is the only basis of the allegation that M/s Padmesh Realtors did not have godown facilities the same has no relevance in the face of documents issued by Statutory Authorities listed in the impugned order and discussed at length in the earlier part of this order - In the absence of any contrary evidence, we find ourselves unable to come any other conclusion than the conclusion arrived at by the CIT(A). The assessee and the Sun city Group of compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial complexes for real estate builders. It is further seen that as per record the assessee was mainly carrying out development activity for Suncity Group of cases as most of the payments have been received from the Suncity Group on account of construction of various projects in different years. The record shows that the assessee declared net taxable income of ₹ 6,16,40,171/- on 13.09.2008 and that the assessee was subjected to search u/s 132 on 25.09.2008 alongwith Suncity Group of cases. Proceedings u/s 153A were initiated and notice u/s 153A dated 07.09.2009 was issued and served upon the assessee. In response thereto the assessee again returned income of ₹ 6,16,40,171/-. 2.1. A perusal of the assessment order u/s 153A/144 r.w.s 143(3) shows that during the course of search on Suncity Group of cases, a document inventorized as Annexure AS-3 Party SCN pages 102-109 was found and seized from the premises of M/s Suncity Projects (P.) Ltd., N-49, 1st Floor, Connaught Place, New Delhi. The document has been described in the assessment order as a ledger account of M/s Padmesh Realtors (P) Ltd. in the books of accounts of the assessee. The department categorized it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m and were found to be not in existence. The specific details of these companies as found mentioned in the seized documents is found reproduced at pages 3 to 5 of the assessment order at para 4.2. The same is extracted hereunder for ready-reference:- 4.2. Further enquiries in this regard was conducted and it came to notice that M/s Padmesh Realtors (P.) Ltd. has made total purchases of ₹ 24,25,68,850/- from a number of companies who were not found to be inexistence. The detail of these companies from whom purchases have been made were enquired and the amount as mentioned in the seized document is reproduced hereunder:- Party Name Registered Address Correspondence Address Amount (Rs.) Daga Trading Co. Pvt. Ltd. Y162, Loha Mandi, Naraina, New Delhi- 110028 Y162, Loha Mandi, Naraina, New Delhi- 110028 2590380.00 Delhi Trading Co. Y/14/17, Second Floor Loha Mandi, Naraina - 110028 Y/14/17, Second Floor Loha Mandi, Naraina - 110028 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e owner of the flat does not know the occupant. It is, reasonable to infer that. these addresses are not in occupation of M/s Padmesh Realtors Pvt. Ltd. 2. Authorization u/s 133A of the I.T.Act 1961 issued for godown at Plot No 3 Patparganj Industrial Area, Delhi Executed, Statement of Sh. Sanjay Aggarwal recorded during survey operations u/s 133A of the IT Act 1961 on M/s Padmesh Realtors Pvt. Ltd at its godown at Plot no-3, Patparganj Industrial stated that the said premises was not given on lease/rent to M/s Padmesh Realtors Pvt. Ltd. Further on inspection, It was found that the said property is a two storeyed building constructed on a plot measuring 450sq meters and that building can never be used for storing the building material. Enquiries conducted at the given address of the , company proved that none of such company Area, Delhi exists at that address.. Regarding the godown; it was submitted in the report that the building can never be used to store the building material. 2.5. In view of the above, the AO was of the view that it cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also went there to verify the existence of the company but the address given by Shri Pramod appears to be incomplete and not in existence. Hence, the summons could not be served. 3. M/s Sai Traders E-279, Nag Mandir Road, Shastri Nagar, Delhi-52. ADIT (Inv.), Unit-V (3), New Delhi along with I T Inspector visited E-279, Nag Mandir Road, Shastri Nagar, Delhi-52 on 27-12-2008 to serve the summons dated 23-12-08. In this premises, it was found that Srnt. Kamlesh Devi, w/o Shri Bani Singh, was residing. She stated that this property belonged to her mother-in-law. She further stated that one part of the mentioned premises was given on rent to M/s Sai Traders about 16 years back. They had left these premises and the current address and whereabouts were not known to her. Hence, the summons could nto be served. 2.7. In the background of the above inquiries as per record show cause notice was issued to the assessee on 27.08.2010 which made the assessee aware that the inquiries from the firms/ companies from whom purchases are said to have been made by M/s Padmesh Rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the reply of the assessee found it to be a general reply to specific findings. He took note of the fact that there is definite evidence available with the department to hold that M/s Padmesh Realtors (P.) Ltd. is not in the business of making any purchases of construction material from any companies. The enquiries according to him also showed that M/s Padmesh Realtors (P.) Ltd. does not have any godown to store the raw material; infact M/s Padmesh Realtors (P.) Ltd. did not even have an independent office as the addresses given were found to be false. He observed that finally the company was found at the address of Suncity Group of cases itself i.e at N-49, 1st Floor, Connaught Place, New Delhi. He also held that M/s Padmesh Realtors (P.) Ltd. also failed to explain that what was the mode of transportation of goods and before selling these goods where were they stored. He was also of the view there is no document with the assessee to show how these were received by the assessee etc. Accordingly for the reasons set out in para 4.6 to para 4.12, the explanation offered by the assessee was not accepted by the AO. The same is reproduced hereunder for ready-reference in the words of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as made payment to M/s Padmesh Realtors (P) Ltd. But, the payments so made have gone to different A/cs of paper companies. Accounts of these companies were also examined but it was found that the money has again been transferred to some other A/cs and after multiple rotations the ultimate destination of the money is not clear. However, the field enquiries have clearly established that none of these companies are firstly in existence and secondly, none of the companies are dealing with building material which can be supplied to M/s Odeon Builders (P.) Ltd. 4.9. The enquires made makes the modus operandi very clear. The assessee has used the group company M/s Padmesh Realtors (P) Ltd as a conduit to inflate the expenditure. M/s Padmesh Realtors (P) Ltd have finally disbursed the payments to a number of companies in order to equalize the sale with the purchase but the fact remains that neither anything was purchased nor anything was sold and the expenditure was finally claimed by M/s Odeon Builders (P) Ltd. by transferring the money to the A/e of M/s Padmesh Realtors (P) Ltd and finally to the account of paper companies. 4.10. In a similar case of bogus purchase, Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is computed as under:- Income returned 6,16,40,171 Addition 19,39,60,866 Total 25,56,01,037 3. Aggrieved by this, the assessee went in appeal before the CIT(A). A perusal of the same specific para 3 page 9 of the impugned order shows that on behalf of the assessee assailing the assessment order it was canvassed that all necessary details and documents substantiating the genuineness of the purchases from M/s Padmesh Realtors (P.) Ltd. were filed before the AO. It would be appropriate at this stage to extract these submissions from the impugned order itself:- (3) During the course of assessment proceedings u/s l53A read with section 143(3) of the LT. Act, 1961, the assessee company has filed all the details documents as sought by the Ld. Assessing Officer including documents in support of genuineness of purchases made from M/s Padmesh Realtors (P)Ltd. Copy of final reply dated 15.12.2010 filed during the course of assessment proceedings is annexed herewith as annexure - X (Page 1 to 7) and copy of documents filed alongwith the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as assessed to income tax vide PAN: AAECP0018N. (e) M/s Padmesh Realtors (P) Ltd. was a subsidiary company of M/s Suncity Projects (P) Ltd., N-49, (Ist Floor) Connaught Place, New Delhi w.e.f. 22- 11-2007. During the year under consideration, the assessee company has executed contract works worth ₹ 71,87,52,620/- for M/s Suncity Projects (P) Ltd. (f) Except for the payment of very small amount, all payments against purchase of goods were made to M/s Padmesh Realtors (P) Ltd. through account payee cheques/ account payee drafts/ account payee RTGS etc. (g) The goods purchased from M/s Padmesh Realtors (P) Ltd. were either transported through goods carrier for which Bilty/G.R's were received or transported through trucks owned by the assessee company having Regn. No. HR 38J 2599, HR 63 4567, HR 63 4568, HR 38F 2405, HR 38F 2409 HR 38J 2600. (h) In support of the identity of M/s Padmesh Realtors (P) Ltd. following documents were filed during the course of assessment proceedings:- S.No. Particulars of documents filed during the course of assessment proceedings Refer to Page No of the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Photocopy of audited annual accounts of M/s Padmesh Realtors (P) Ltd. for the year ended 31 st March 2008 129 to 147 (v) Photocopy of VAT returns filed by M/s Padmesh Realtors (P) Ltd. for financial year 2007-08 154 to 168 (vi) Photocopy of IT returns filed by M/s Padmesh Realtors (P) Ltd. for financial year 2008-09 169 to 865 (vii) (i) Photocopy of all Invoices issued by M/s Padmesh Realtors (P) Ltd. (ii) Photocopy of all Bilty/GR s for transportation of goods (iii) Photocopy of all F.No.38 issued by Haryana VAT Deptt./F.No.47 issued by Rajasthan VAT Deptt. (viii) Photocopy of National Permit of Trucks owned by assessee company 866 to 871 (bold texted for emphasis) 3.2. On the basis of the above documents it was canvassed that the claim was genuine and these documents on record demonstrate this fact. On the basis of these documents it was canvassed that they demonstrated the correctness of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om M/s Padmesh Realtors (P.) Ltd. was submitted was further substantiated by various other facts available on record. These submissions are found reproduced at pages 14-15 of the impugned order and are extracted hereunder for ready-reference:- (k) The genuineness of purchases made by the assessee company from M/s Padmesh Realtors (P) Ltd. is further substantiated on account of the following:- (i) The accounts of the assessee company have been regularly audited under the companies Act as well as Income tax Act. (ii) The assessments of the assessee company have been completed u/s 143(3) of the IT Act, 1961 from year to year basis and trading results as declared by the assessee company have been accepted by the Income tax Deptt. in all these assessments. No addition/disallowance has been made in relation to purchases in any of these assessments. (iii) No incriminating material has been found during the search seizure operation u/s 132 of the IT Act, 1961 carried out on various business premises of the assessee company and residential premises of its directors. iv) The comparative trading results of the assessee company for the last three years are as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption 84,29,72,332 51,40,88,214 37,46,81,298 C % of Material consumption to total value of contract work (5) of B to A(iii) 69.42% 70.62% 68.82% 3.5. Referring to the material available on record it was further argued that no disallowance has been made by the AO out of declared consumption of material/adjustment to declared trading results of the assessee company has been made by the AO even in the Block assessment completed u/s 153A r.w.s 143(3) of the Income Tax Act, 1961 for assessment years 2003-04 to 2007-08 and assessment year 2009-10 except in the year under consideration. Referring to the comparison chart extracted above from the impugned order it was argued that it shows that if the purchases made from M/s Padmesh Realtors (P.) Ltd. are treated as bogus then the percentage of material consumption would come down by more than 15% to 17% which would not be feasible under any circumstances as it is impossible to execute works contract amounting to ₹ 1,21,42,89,987/- in the year under consideration with material consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnish/explain the source of the source i.e. the details of purchases made by M/s. Padmesh Realtors (P) Ltd. from whom the assessee company has made purchases during the financial year 2007-08. However the assessee company has obtained the details and documents from M/s Padmesh Realtors (P) Ltd. relating to purchases made by them in financial year 2007-08 for making supply to the assessee company as well as to other parties, the details documents received from M/s Padmesh Realtors (P) Ltd. and filed during the course of assessment proceedings are as under:- (a) Padmesh Realtors (P) Ltd. has made purchases amounting to ₹ 24,25,69,850.50 during the financial year 2007-08. Party wise details of purchases made is enclosed herewith. (b) Except for the payment of very small amount M/s Padmesh Realtors (P) Ltd. has made all the payments through account payee cheques/RTGS against purchases made by them during the financial year 2007-08. 3.9. Apart from the above in further support of the further claim of purchases made by M/s Padmesh Realtors (P.) Ltd. during the relevant period photocopies of the sale invoices issued to M/s Padmesh Realtors (P.) Ltd. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd. have been duly accounted for by various suppliers of goods in their books of accounts as evidenced by their audited annual accounts, VAT (Sales Tax) returns and I.T. returns etc. (v) Huge amount of Sales Tax/ VAT has been paid by M/s Padmesh Realtors (P) Ltd. on purchases made from various suppliers which were charged by various suppliers in their invoices issued to M/s Padmesh Realtors (P) Ltd. (vi) Hence the above facts duly establish the genuineness of purchases made by M/s Padmesh Realtors (P.) Ltd. beyond any doubt. 3.11. After addressing the facts in support of its claim the record further shows that the assessee also advanced a detailed point-wise reply assailing the conclusions drawn by the AO. Theses submissions are extracted in pages-28 to 36 of the impugned order wherein after referring to the documents available before the AO the factual position as concluded in the assessment order was further assailed vide para 10 of the impugned order wherein the reliance placed upon the judgement of the Delhi High Court in the case of CIT vs La Medica (2001) 250 ITR 575 (Delhi) by the AO was stated to be distinguishable on facts. The said reply i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments filed during the course of assessment proceedings Refer to Page No of the Paper Book-A (i) Memorandum Articles of Association Certificate of Incorporation issued by ROC 1 to 25 (ii) Photocopy of PAN card 26 (iii) Photocopy of Registration Certificate issued by VAT Deptt. (Sales Tax Deptt.) 27 (iv) Photocopy of Form No. 18 filed with ROC 28 to 31 (v) Photocopy of NOC issued by land lady Mrs. Kamini Gupta for allowing use of business premises at A-102, Dream Apartment, Plot No.-14, Sector-22, Dwarka, New Delhi-110075 proof of her ownership 32 to 37 (vi) Photocopy of NOC issued by M/s Kumar Ice Facto (P) Ltd. for allowing use of godown premises at Patpar Ganj, Industrial Area, Delhi-110092 alongwith proof of its ownership. 38 to 40 (vii) Photocopy of DVAT 07 regarding addition Godown premises (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. The said premises were used by M/s Padmesh Realtors (P) Ltd. for Godown purposes. In support of it the assessee company during the course of assessment proceedings has filed photocopy of NOC issued by M/s Kumar Ice Factory (P) ltd. to M/s Padmesh Realtors (P) Ltd for allowing use of said premises for Godown purposes, photocopy of MCD data relating to the said property showing area of the said premises as 2000 sq. meters, photocopy of Property Tax payment receipt, and photocopy of Sales Tax documents ( DV AT -07 its annexures ) showing the said premises as Godown of M/s Padmesh Realtors (P) Ltd. in the records of Sales Tax Deptt. [Refer Page No. 38 to 50 of the Paper Book-A] A perusal of these documents duly establish the fact that M/s Padrnesh Realtors (P) Ltd. had warehouse ( Godown ) at 3, Patparganj Indl Area, Delhi-10092 constructed on a plot admeasuring 2000 sq. Mtrs. and was duly used by it for storage of materials. It seems the Deptt has visited at some wrong address resulting into inspection of some other site having area of 450 sq. Mtrs and recording of statements of some person not related to M/s Padmesh Realtors (P) Ltd. in any manner whatsoever. Moreover, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... She has also given the Mobile No. of Mr. Pramod. On making enquiry on the said mobile number, Mr. Pramod confirmed that M/s Shri Ganpati Sales was carrying on business from the aforesaid premises. Regarding Transfer of Business Premises by M/s Shri Ganpati Sales, it seems that the Assessing Officer has noted the incomplete address, the new address of M/s Shri Ganpati Sales was 110-112, 16/3 Abdul Aziz Road, Karol Bagh, New Delhi [Refer to page no. 1686-88 of the Paper Book-B relating to confirmed copy of account on which new address of M/s Shri Ganpati Sales has been given]. The Assessing officer has Missed to note down 16/3 prior to noting of Abdul Aziz Road. Even otherwise the findings of the Assessing officer himself proved that Mr. Pramod has confirmed that M/s Shri Ganpati Sales was carrying on business from the aforesaid address. M/s Shri Ganpati Sales was registered with VAT (Sales Tax Deptt.) vide TIN 07150310353 and assessed to I. Tax vide PAN BGDPS8184D. In support of genuineness of purchases made by M/s Padmesh Realtors (P) Ltd. from M/s Shree Ganpati Sales, the assessee company during the course of assessment proceedings has filed photocopy of Invoices, confirmed co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of GR's/Bilty's annexed with each every invoice, copies of which were duly filed during the course of assessment proceedings [Refer Page 169 to 871 of the Paper Book-A] and also discussed in reply dated 15,12.2010 filed during the course of assessment proceedings [Refer Annexure 'X' - Page 1 to 7]. Similarly, M/s Padmesh Realtors (P) ltd. had godown at 3, Patpar Ganj Indl, Area, Delhi-l l 0092 which was built on plot admeasuring 2000 sq mtrs, the relevant supporting documents were duly filed during the course of assessment proceedings.[Refer Page No.38 to 50 of the Paper Book-A], Hence, the assessee company has duly discharged its onus with respect to discloser of mode of transportation as well as discloser regarding place of warehouse maintained by M/s Padmesh Realtors (P) Ltd. (8). In Para 4.7, the Assessing Officer has stated that confirmed copy of accounts of those parties from whom purchases has been made by M/s Padmesh Realtors (P) Ltd. were not filed. This statement of the Assessing Officer is factually incorrect. Infact, confirmed copy of account of all those parties from whom M/s Padmesh Realtors (P) Ltd. has made purchases during the financial year 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxii) M/s India Steels 1785 xxiii) M/s R.V. Mercantile (P.) Ltd. 1804 1805 Further with regards to non-production of Managing directors or these companies, it is submitted that the Assessing Officer has never asked the assessee company to produce these persons Moreover, the assessee company has not purchased materials from these companies. The assessee company has not made purchase of materials from these companies rather made purchases from M/s Padmesh Realtors (P.) Ltd. who in turn made purchases from these companies. The assessee company cannot be asked to produce the directors of these companies as the onus to be discharged by the assessee company can be laid to explain the source but not source of the source. Hence, there was no failure on the part of the assessee company to discharge its onus on this account also. (9) In para 4.8 4.9 of the assessment order the Assessing Officer has himself stated that the assessee company has made payment through account payee cheques to M/s Padmesh Realtors (P) Ltd. The Assessing Officer has without bringin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster concern whereas it is not so in the present case. In the cited case the rate at which purchases were made was high whereas it is not so in the present case. (f) In the cited case the seller couldn't produce any document in support of purchases of goods by him whereas it is not so in the present case. Infact in the present case the assessee company has obtained and filed all the documents in support of purchases made by its supplier i.e. documents relating to purchases made by M/s Padmesh Realtors (P) Ltd. In view of the above, it is clear that the facts of the case cited by Ld. Assessing Officer in his order are completely different to the facts of the present case and hence the judgment given in the cited case has no applicability to the present case. (Emphasis by bold texting provided by the Bench) 3.12. Apart from the above submissions on facts the legal position based on judicial pronouncements was also referred to for consideration before the CIT(A). For the proposition that in the facts of the present case, the purchases cannot be treated as bogus, reliance was placed upon the following judgements:- (i) DCIT vs Adinath Industries (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed that No.- 22 by itself does not exist and either there should be a Block mentioned or a Khasra Number and in very few cases only number may also be a sufficient address. Accordingly the address given was claimed to be the correct address. 3.19. Further addressing the alleged issuance of summons etc. to the parties from whom M/s Padmesh Realtors had made the purchases it was submitted that the assessee was never informed that summons u/s 131 were issued to the parties from whom M/s Padmesh Realtors (P.) Ltd. had made purchases nor has this fact been confronted to the assessee that no such company was found at the given address. The inference drawn was assailed on the ground that adverse evidence has been relied upon which was gathered at the back of the assessee which was not confronted. Similarly the recording of statements of Mrs. Kamini Gupta, Sh. Sanjay Aggarwal, Smt. Rekha Sachdeva, Smt. Kamlesh Devi and telephonic conversation with Sh. Pramod was stated to have never been brought to the notice of the assessee as neither the AO has provided any statement of these persons nor has the assessee been confronted with the same. In support of the said assertion, affidavit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'B' etc. He further concluded that simply number 22 does not exists and it appears that company has not given proper address. This conclusion of the Assessing Officer is not correct. In Amar Colony all the three situations exists i.e. in some part blocks are given, in some part Khasra No's are given and in some part simple No's are given. This facts can be verified from the google search of the site of Mahanagar Telephone Nigam, 'New Delhi. A perusal of the same shows that in Amar Colony, Main Rohtak Road of N angloi premises having No' s only also exists (i.e. without any block or Khasra No. etc.) Hence the assessee company has given the ful1 and right address of M/s R.V. Mercantile (P) Ltd. which was there till the assessment proceedings for Ass. Year 2008-09 were completed. (4) Clarification regarding Alleged Issuance of summons Alleged recording of statements. a) During the whole assessment proceedings for A.Y 2008-09, completed uls 143(3) r.w.s. 153A of the Income Tax Act, 1961, the Assessing Officer has not brought to the notice of the assessee company regarding issuance of any summons u/s 131 of the Income Tax Act, 1961 to the parties from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct addressed by the manager of the Punjab National Bank Ltd. to the ITO, no reliance could be placed on it, since it was not shown to the assessee until at the stage of preparation of supplemental statement of the case and no opportunity to cross-examine the manager of the bank could in the circumstances be sought or availed of by the assessee. (5) Declaration regarding evidences filed The evidences filed with your honour during the appellate proceedings are only those which were filed with the Assessing Officer during the course of assessment proceedings completed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961, No additional evidence has been filed before your honour. (6) Producing M.D. of padmesh Realtors (P.) Ltd. During the course of whole assessment proceedings, the Assessing Officer has never asked the assessee company to produce any director or managing director of M/s Padmesh Realtors (P.) Ltd.. In fact during the whole assessment proceedings for Ass. Year 2008-09, the Assessing Officer has not asked the assessee company to produce any person. (emphasis provided by bold texting) 3.22. In order to further demonstrate the fallacy in the stand of the AO, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t where ₹ 19 crore odd is treated as bogus extracted from page 42 of the impugned order is reproduced hereunder:- S. No. Particulars Ass Yr 2008-09 (Rs.) Ass Yr 2007-08 (Rs.) Ass Yr 2006-07 (Rs.) Ass Yr. 2005- 06 (Rs.) A (i) Certified Contract work 1,12,67,62,111 72,79,62,927 54,44,42,549 38,07,62,152 (ii) Uncertified Contract Work (WIP) 8,75,27,876 - - - (iii) Total value of contract work 1,21,42,89,987 72,79,62,927 54,44,42,549 38,07,62,152 B Material Consumption 84,29,72,332 51,40,88,214 37,46,81,298 26,21,37,200 C % of Material consumption to total value of contract work (5) of B to A(iii) 69.42% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d these details from M/s Padmesh Realtors (P) Ltd. and filed copies of sales invoices issued by these parties to M/s Padmesh Realtors (P) Ltd., confirmed copy of accounts of these parties in the books of M/s Padmesh Realtors (P) Ltd., Bank statement of M/s Padmesh Realtors (P) Ltd. Showing payment made to these parties and copy of IT returns, VAT returns audited annual accounts of these parties etc. during the course of assessment proceedings, in support of genuineness of purchases made by M/s Padmesh Realtors (P.) Ltd. (d) That the allegations that assessee could not explain the actual address of M/s Padmesh Realtors (P.) Ltd. is completely baseless. At no point of time, the assessee company expressed its ignorance about the said Company. The address of M/s Padmesh Realtors (P) Ltd. was never sought by the Assessing Officer from the assessee company. In fact, the existence of M/s Padmesh Realtors (P) Ltd. was not only in the knowledge of the Assessing Officer but also within the knowledge of Investigation Wing of the IT. Deptt. who during the course of post search investigation had inquired regarding the subscribing of Compulsorily Convertible Debentures of Padmesh Realtors ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-110092 is constructed on a plot measuring 450 sq. meters. Infact the said Godown is constructed on a plot measuring 2000 sq mtrs. The said premises were used by M/s Padmesh Realtors (P) Ltd. for Godown purposes. In support of it the assessee company during the course of assessment proceedings has filed photocopy of NOC issued by M/s Kumar Ice Factory (P) ltd. to M/s Padmesh Realtors (P) Ltd for allowing use of said premises for Godown purposes; photocopy of MCD data relating to the said property showing area of the said premises as 2000 sq. meters; photocopy of Property Tax payment receipt and photocopy of Sales Tax documents (DVAT-07 its annexures ) showing the said premises as Godown of M/s Padmesh Realtors (P) Ltd. in the records of Sales Tax Deptt. [Refer Page No. 38 to 50 of the Paper Book - A] That a perusal of these documents duly establishes the fact that M/s Padmesh Realtors (P) Ltd. had in his possession a warehouse (Godown) at 3, Patparganj Indl. Area, Delhi-l0092 on a plot admeasuring 2000 sq. Mtrs. which was duly used by it for storage of materials. That it seems the Deptt. has visited at some wrong address resulting into inspection of some other site having are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales. That in this finding it is stated that some Ms. Rekha Sachdeva was residing in premises no. 30/7B, Gali No.6,Vishwas Nagar, Shahdara, Delhi-32 who has stated that one room on Ground Floor of the said premises was given on rent to Mr. Pramod. She has also given the Mobile No. of Mr. Pramod. On making enquiry on the said mobile number, Mr. Pramod confirmed that M/s Shri Ganpati Sales was carrying on business from the aforesaid premises. That regarding the transfer of business premises by M/s Shri Ganpati ' Sales, it seems that the Assessing Officer has noted the incomplete address, the new address of M/s Shri Ganpati Sales was 110-112, 16/3 Abdul Aziz Road, Karol Bagh, New Delhi [Refer to page no. 1686-88 of the Paper Book - B relating to confirmed copy of account on which new address of M/s Shri Ganpati Sales has been given]. That the Assessing officer has missed to note down 16/3 prior to noting of Abdul Aziz Road. That even otherwise the finding of the Assessing officer himself proved that Mr. Pramod has confirmed that M/s Shri Ganpati Sales was carrying on business from the aforesaid address. M/s Shri Ganpati Sales was registered with VAT (Sales Tax Deptt.) vide TIN 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portation of goods and they do not have any godown facility to store the material. In fact mode of transportation has been duly reflected on each Invoice issued by padmesh (P) Ltd. to the assessee company and also on the accompanying copy of GR.'s/Bilty's annexed with each every invoice, copies of which were duly filed during the course of assessment proceeding [Refer Page 169 to 871 of the Paper Book-A] and also discussed in reply dated 15.12.2010 during the course of assessment proceedings [Refer Annexure 'X'- Page 1 to 7]. Similarly, M/s Padmesh Realtors (P) ltd. had Godown at 3, Patpar Ganj Indl. Area, Delhi-110092 which was built on plot admeasuring 2000 sq mtrs, the relevant supporting documents were duly filed during the course of assessment proceedings.[Refer Page No.38 to 50 of the Paper Book-A]. Hence, the assessee company has duly discharged its onus with respect to disclosure of mode of transportation as well as discloser regarding place of warehouse maintained by M/s Padmesh Realtors (P) Ltd. (k) That in Para 4.7, the Assessing Officer has stated that confirmed copy of accounts of those parties from whom purchases has been made by M/s Padmesh Rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case as detailed below:- (i) In the cited case the Assessing Officer has brought material on record to prove that the supplier has no means to carryon business and he is in employment with sister concern of the purchaser. No such fact exists in the present case. No material has been brought on record by the Assessing Officer to suggest that the suppliers of M/s Padmesh Realtors (P) Ltd. were its employee. (ii) In the cited case the bank account of the supplier was opened with the introduction of the purchaser whereas it is not so in the present case. (iii) In the cited case the goods were not accepted by the purchaser but was accepted by some irrelevant person whereas it is not so in the present case. (iv) In the cited case supplier has immediately withdrawn the payment from his bank account whereas it is not so in the present case. (v) In the cited case the statement of the supplier was recorded in which he has stated that he was a petty employee with purchaser's sister concern whereas it is not so in the present case. vi) In the cited case the rate at which purchases were made was high whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of alleged recording of statements of third parties recorded at his back, as neither the copy of any such statement was provided nor any right to confront with the same was allowed to the assessee company. B. From the details filed by the assessee and referred to above it is clear that the assessee has discharged its primary and initial onus to substantiate the genuineness of the purchases made from M/s Padmesh Pvt. Ltd. by filing the various documents as referred above including the documents relating to the purchases made by M/s Padmesh Realtors Pvt. Ltd. from various parties. Further even during the course of search at appellant's premises on 25.09.08 no incriminating document was found with reference to the non-genuineness of the purchases made by the assessee from M/s Padmesh Realtors Ltd or the parties from whom M/s Padmesh Realtors Pvt. Ltd has made the corresponding purchases. The AO has also not brought any cogent material on record to controvert the appellant's explanation and to hold that the purchases made by the appellant from M/s Padmesh Realtors Pvt. Ltd were bogus. From the observations of the AO in the assessment order it is seen that he has relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nserved with the comment that no such company at the given address. However from the assessment order it is observed that this fact has not been confronted to the assessee or M/s Padmesh Realtors Pvt. Ltd. as seen from the assessment order of either of these assessees. Rather when the confirmed copy of accounts of these parties were filed by the assessee it was required on part of the A.O. to have asked for the production of the Managing Director or Principal Officers of these entities in case of M/s Padmesh Realtors Pvt. Ltd. if any doubt existed regarding the genuineness of these purchases. No such exercise has apparently been done. Thus the entire disallowance in this case is based on third party information gathered by the Investigation Wing of the Department, which have not been independently subjected to further verification by the AO who has not provided the copy of such statements to the appellant, thus denying opportunity of cross examination to the appellant, who has prima -facie discharged the initial burden of substantiating the purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts and the fact of payment t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be filed was directed to be first exchanged amongst the parties so as to ensure that the synopsis contains only what was argued and also to enable the parties to bring out anything which was either not addressed and referred to therein or anything which was referred to but ignored in the synopsis. Accordingly in terms of the direction the parties filed synopsis on 14/2/2014. The synopsis filed has been duly exchanged between them before 14th Feb. 2014. Whereas the synopsis filed by the Ld. CIT DR runs into 4 pages the Ld. AR filed a synopsis running into 34 pages which in lighter humour was referred to by the Ld. CIT DR as a compendium instead of a synopsis. The remark was well received by the LD. AR who stated that he has necessarily tried to sum up all necessary facts in an endeavour that nothing salient is missed out. 6. At the time of hearing the Ld. CIT, DR inviting attention to the Assessment Order and the submissions advanced by the assessee before the Ld. CIT(A) which it was argued has wrongly been accepted by him submitted that the Revenue is aggrieved by the conclusion drawn by the CIT(A) wherein he has completely ignored relevant facts and has allowed himself to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny existence of such a company at the given address. She also stated that she was even unaware that any such company existed (page 4 of AOs order). Godown address was given as Plot No. 3, patparganj Industrial Area, Delhi where a survey was launched. Person at the said premises, Shri Sanjay Agarwal, stated that no osuch company existed. Both the above address was given by the assessee during the search operation. It was also observed that onward purchases were made by Padmesh Realtors Ltd., from non-existent entities. Summons to all the entities from whom purchase had been made by Padmesh Realtors Ltd., were issued. Each one of them were found non-existent but for one Ishwar and Sons Timber Traders from whom purchase of ₹ 57,200/- only had been made (Page 10 of AOs order). NOC issued by Mrs. Kamini Gupta at Pg 32 of PB does not say that Padmesh Realtors Ltd., was operating from A-102, Dream Apartment, Plot No. 14, Dwarka, New Delhi. In fact page 36 of PB suggests that /s Odean Builders were constructing the said apartment. As per Municipal Law regulators, the said Apartment was being uses for residential purpose and could not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ource' should be not be insisted upon by the AO. In fact in CIT Vs. N. R. Oortfolio 96 DTR (Del) 281, the jurisdiction High Court has held that doctrine of Source of Source or Origin of Origin cannot be applied universally without reference to the factual matrix of the case. In the case in hand during the search operation, post search enquiries and in proceedings before the AO, M/s. Padmesh Realtors have been found to be non-existent. Assessee has relied on Raj Kumar Jain Vs. ACTU 50 ITD 1 TM and CIT Vs. J.M.D. Computers Communication (P) Ltd 20 DTR (Del) 317. Both the cases are distinguishable. In Raj Kumar Jain the Ao did not have any evidence of household express. In the casse in hand, the AO has overwhelming evidence of bogus purchase. In J.M.D Computers, the AO had accepted purchases. In the case in hand, purchases have not been accepted. Another case relied upon by the AR is Fair Finvest Ltd 357 ITR 146(Del). In that case the AO had blindly followed the report of the Intelligence wing and had not done any Investigation. In the case in hand diligent inquiry has been done after getting a lead from the Investigation Wing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon by the assessee which has been considered while passing the impugned order 7.3. It was argued on behalf of the assessee and also has specifically been addressed in the synopsis filed that in the present appeal there are only two issues on the basis of which the department has filed its case. 7.3.1. The first issue which has been raised by the department based on the assessment order is the identity of M/s Padmesh Realtors P. Ltd and the second issue is the genuineness of the purchases made by the assessee from M/s Padmesh Realtors P. Ltd which in turn has made purchases from various suppliers which has been doubted by the AO. It has been argued by the Ld. AR that the AO has based his order on the adverse inferences drawn on these two issues which the CIT(A) has discussed, addressed and considered at length on which reliance is being placed. 7.4. On behalf of the assessee addressing the first issue namely the allegation that M/s Padmesh Realtors P. Ltd is a paper company Ld. AR assailing the said inference referred to the various material on record brought to the notice of the AO submitted that facts have been ignored by the AO. Referral was made to page 5 6 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order it was submitted that the existence of M/s Padmesh Realtors P. Ltd is evidenced by the financial statements of M/s Padmesh Realtors P. Ltd for the assessment year under consideration specific page 196 to 194 were referred to for the said purpose. For ready reference, we extract these submissions from the synopsis filed hereunder:- It will also be important to refer to the financial statements of M/s Padmesh Realtors Pvt. Ltd for the assessment year under consideration which are placed at paper book pages 196 to 1994. Page 1984 is the balance sheet of this company which shows that it has raised money to the extent of ₹ 600 Crores by way of Compulsory Convertible Debentures from Deutsche Bank. Page 1981 is the profit and loss account which shows that besides making sales of ₹ 24,34,11,036/- (which includes sales to the assessee company of ₹ 19,39,60,866/-) it has earned interest income of ₹ 17,66,20,450/-. It has filed its return of income placed at paper book page 1962 showing taxable income of ₹ 2,34,42,494/- and paid taxes of ₹ 86,17,635/-. The address in the return filed is A-102, Dream Apartment, Plot No. 14, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded by the AO it was submitted has no relevance as he is an unconcerned person and there is no need for him to know M/s Padmesh Realtors P. Ltd and Padmesh Realtors also do not know him. 7.9. Addressing the location of the go-down it was submitted was actually a plot measuring 2000 square meters which is evidenced by photocopy of NOC issued by M/s Kumar Ice Factory Pvt. Ltd to M/s Padmesh Realtors P. Ltd which is available on record before the AO as well as the CIT(A) and the very same Paper Book has been placed before the Bench. Assailing the action of the AO it was argued that if the address recorded by the AO was wrongly recorded then how can the assessee be penalized for it. It was contended that in the facts of the case NOC of M/s Kumar Ice Factory, Sales Tax documents and ownership of the said concern of the plot of 2000 sq. meters which has been allowed to be used by Padmesh Realtors is on record which cannot be ignored without any contrary evidence. The basis for ignoring the same based on the enquiry from a wrong person which was half-hearted and incomplete cannot be given a precedence. Accordingly the documentary evidence in the face of these half hearted enquiries it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) Sai Traders. 7.12. Referring to the discussion of the AO qua R. V. Mercantile Pvt. Ltd. it was submitted that the AO observes that it appears that the company had not given proper address . It was argued this observation has been interpreted by the AO as an adverse observation to hold that R. V. Mercantile does not exist. The interpretation by the AO, it was submitted is not correct. It was his submission that if the address was not proper (correct address) then what stopped the AO to complete the enquiry. Inviting attention to paper book page 1930 which is a letter address to the AO dated 15/12/2010 where all the details about M/s Padmesh Realtors P. Ltd were provided it was submitted that the assessee in that letter had also stated that in case any other information/explanation is required the same would be furnished on hearing from the AO. Despite this clear submission where the assessee had furnished all leading evidences no enquiry was made by the AO. Inviting attention to letter dated 23/12/2010 copy of which is placed at page 1931 wherein reference is made to the some questionnaire in post such enquiries attention was invited to the fact that the assessee had stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the hearing the assessee has made a written request seeking to be informed of the information with the department which is being relied upon to hold that the firm was not in existence. The said request it was submitted has not been responded to by the AO and the CIT(A) has taken note of this fact at page 47 para (h). Referring to the same it was pointed out that the Assessing Officer missed to note to down 16/3 prior to Abdul Aziz Road, Karol Bagh. The said concern it was pointed out was registered with VAT (Sales Tax Department's) whose specific TIN and PAN details had been provided to the AO in order to establish its genuineness. Photocopy of its invoices confirmed copy of accounts for the specific period were filed. Copy of Bank Statements of M/s Padmesh Realtors from where cheques were issued to M/s Ganpati Sales it was stated were filed along with copy of Income Tax Return for 2008-09 assessment year of the proprietor of the said concern was Mr. Amit Sharma. These evidences in support of the genuineness of transactions of M/s Padmesh Realtors P. Ltd who purchased the goods from said Ganpati Sales it was submitted has not been rebutted by any documentary evidence by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Padmesh Realtors to the assessee company and is accompanied by copy of GR/bilties attached with each and every invoice. These copies it was submitted were filed in the course of the assessment proceedings and were available to the authorities and also form part of the Paper Book filed at pages 169-871 of the Paper Book. These are the same copies which were filed before the AO in reply dated 15.12.2012. Addressing the concern of storage of the material by M/s Padmesh Realtors it was reiterated that it was stored at godown at 3, Patparganj Industrial Area which was a plot measuring 2000 sq. meters. Accordingly it was argued the assessee had fully discharged onus with respect to mode of transportation as well as place of storage godown. 7.17 Assailing the allegation of the AO addressed at page 10 para 4.7 that the assessee had not filed confirmations from these parties, heavy reliance was placed upon the finding of the CIT(A) recorded in para (k). A perusal of the same it was submitted would show that the AO has been found to record incorrectly. It was submitted that confirmed copy of account was filed in the reply dated 15/12/2010 before the AO during the assessment proceedings of al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd as to what happened after the summons were received which as per the assessment order were stated to be issued on 21.09.2010. It was argued that the assessee has along been appearing appeared as would evident from the assessment proceedings and at no stage this issue was brought to the notice of the assessee by the AO. On the contrary it was submitted the assessee has led sufficient evidence in support of its purchases. Referring to the material available on record it was submitted that infact vide letter dated 23.12.2010 the assessee had specifically asked the AO to provide copies of the enquiry or reports available if any so that the assessee company can reply to the same. It was submitted that ignoring these facts the AO has drawn inference contrary to the evidence of the suppliers which are placed in the Paper Book-874 to 1026. Specific attention was invited to page 39 of the impugned order para 4(a) of the same and it was argued that no adverse evidence has been led by the AO or the department to rebut this in the present proceedings. 7.20 Addressing the para-wise reply to the synopsis of the department it was submitted that it is a fact on record that the assessee is en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al document wherein nothing incriminating has been referred. 7.20.4 Addressing the allegation that the assessee has not been able to give the precise address of M/s Padmesh Realtors it was submitted that this observation is incorrect as all along assessee has stated that the address of the M/s Padmesh Realtors is A-102, Dream Apartment, Plot No-14, Sector-22, Dwarka, Delhi. This fact is evident as spot verification was also carried out by the department. The ownership of the said flat was with Mrs. Kamini Gupta which also is a fact and the various documents available on record demonstrate that the said address was the registered office of Padmesh Realtors. 7.20.5 It was argued that the allegation that the claim of godown was wrong was based on the statement of Mr. Sanjay Aggarwal who had no occasion to speak for Padmesh Realtors or M/s Kumar Ice Factory and the link with them has not been established by the department. On the contrary the godown facilities utilised were Plot No. 3, Patparganj Industrial Area in the name of Kumar Ice Factory whose documents were made available before the AO and have not been contradicted. The enquiry it was argued was conducted on the wrong addre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted under Municipal Laws it was argued cannot be a ground for suspecting that business has not been carried out and infact in Delhi most of the companies have registered offices set out in posh residential colonies such as Greater Kailaish, Gold Links, Grand Park, Hauj Khas, Pitampura etc. It was submitted that if the business is running from the DDA Apartment it cannot be said that the business was not genuine. 7.20.9. Addressing the departmental objection to the user of godown of Kumar Ice Factory it was submitted the claim is supported by the NOC available on record given at the time of VAT registration which is a statutorily required by the VAT authorities. The objections of the Revenue that it was a tampered document were assailed on the ground that it was filed only in support of the claim that the area of the plot was 2000 sq. meters and the arguments that why it was not found in the course of this search it was submitted is for the search party to decide and it is not the fault of the assessee to get every document seized in the course of the search. It was emphasized that VAT registration is handled by VAT advocate /consultant. The ownership of these premises by Mrs. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd reliance was placed upon the arguments advanced on the impossibility of performing the works contract without the supplies. Accordingly vide para 18, it is stated that the allegation of the Ld. CIT DR that the CIT(A) has overlooked these enquiries is incorrect as the CIT(A) it has been submitted has dealt with them at length and also considered the documents and the explanation as such it was stated that it was not incumbent upon him to carry out any further inquiry. 7.20.13. Vide para 19 the allegation of the department that the assessee is blindly following the principle laid down in Kishan Chand Cellaram is assailed. It is stated in the synopsis that the CIT(A) has dealt with the evidence which was before the AO and on that basis of the same has reached a satisfaction that the purchases were genuine. 7.20.14. Reliance placed by the department on CIT vs Sonal Construction 260 CTR (Del) 37 (para 20) and JCIT vs Swarup Vegetable Products Industries 96 ITD 468 (Del) (para 13) was stated to be misplaced as the facts were entirely distinguishable. For ready reference we reproduce the distinction drawn in Ld. AR's own words from the synopsis filed:- As rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there was no such concern at the given address. The AO further gave opportunity to the assessee to produce M/s AS. Engineering Works. The assessee showed its inability about the present whereabouts of AS. Engineering Works. The AO made further enquiry from the bank account of the A.S. Engineering Works and it transpired that there was no other transaction except the so called receipt of ₹ 20 Lacs. The CIT(A) has deleted the addition on the ground that the assessee has not shown the capital gain. The receipt of ₹ 20 Lacs could not be considered as unexplained cash credit. It was in this background that the Tribunal has stated that merely because the amount of capital gain has been shown by the assessee cannot be a ground for deleting the addition and the CIT(A) was supposed to give a positive finding of fact regarding the sale of the machinery and the alleged receipt of ₹ 20 Lacs from A.S. Engineering Works. The allegation levied by the AO was not rebutted by the assessee at any stage and even by the CIT(A) and there was negative finding of the CIT(A) that assessee having shown the sale proceeds as capital gain the same cannot be taxed under Section 68. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en source of source has been examined by the AO and that is why COIT(A) has given a finding that purchases cannot be doubted. 7.20.16 The reliance placed on the principle decided in the case of Raj Kumar Jain vs ACIT 50 ITD 1 and ACIT vs Anima Investments Ltd. 73 ITD 125 was relied upon and the distinction drawn by the Revenue was stated to be of no relevance on the following grounds :- 23. The judgment of Raj Kumar Jain v ACIT 50 ITD 1 and ACIT vs Investments Ltd. 73 ITD 125 are in support of the contention that the Revenue is seeking a second innings to make out a case having failed make in the first innings. In Raj Kumar Jain case also the plea of the revenue was that looking to the standards and the facts and circumstances has gathered during the course of the search, the drawing are very low and that is why the additions were made and this explanation given by the assessee regarding the drawings, the revenue wanted the matter to be set asided for further examination. It was in this context the Tribunal has refused to set aside the matter for further examination. This exactly is the case here also. The AO in the assessment order has not made any adverse ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort to 30% if the AO's version is accepted which is quiet an impossible G. P. rate in the nature of trade. Cognizance of this fact has been taken of by the CIT(A) in his order. On the basis of these facts evidences and arguments it has been submitted vide para 27 of the synopsis that it is a case where search has been carried out on the premises of the assessee and nothing incriminating qua these purchases made has been found in the absence of any incriminating material adverse inference cannot be drawn on the basis of the documents relied upon by the Revenue. 8. We have heard the rival submissions and perused the material available on record. The decision and judicial precedents relied upon by the parties have been taken into consideration. In the facts of the present case it is seen that the assessee admittedly has been carrying out development activity for Sun city Group of Companies and has on the basis of most of the receipts received from the Sun city Group returned an income of ₹ 6.16 crore odd on 13/9/2008. In view of the fact that the assessee along with Sun city Group of cases was subjected to search u/s 132 on 25/9/2008 proceedings u/s 153A were initiated an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med the purchase amounting to about ₹ 55,000/-. Placing reliance on CIT Vs. La Medica, cited supra the AO concluded that the assessee had made a fictitious arrangement to inflate the purchase. The record shows and as has been addresssed at great length in the earlier part of this order that in the course of the arguments advanced by the Revenue the action of the CIT(A) in accepting the assessee's claim has been assailed on the reasoning that the assessee was unable to give the correct address of M/s Padmesh Realtors and at the address given it was revealed that Mrs. Kamini Gupta owner of the said premises has denied any knowledge of the existence of the such company at the given address. The Ld. CIT DR has also stated that the said concern had no godown facilities for storage and reliance has been placed upon the statement of Shri Sanjay Agrawal who stated that there was no such company. The Ld. CIT DR has further assailed the action of the CIT(A) on the ground that the purchases made by M/s Padmesh Realtors were also from non-existent companies as summons to all the entities from whom purchases are stated to be made have returned back unserved. The exponential growth in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never carried through to their logical conclusion. It has been vehemently argued that based on suspicions and surmises the claim of the assessee based on documentary evidence on record which remains unrebutted by any evidence cannot be set aside and the issue restored for causing another set of enquiries in the absence of any material warranting such a decision. Apart from reiterating the arguments made before the CIT(A) which have been addressed at length in the earlier part of this order the arguments of the Ld. CIT DR casting doubts on the assessee's claim by advancing arguments to cause doubts by suggesting that Padmesh Realtors incorporated on 16/1/2008 has shown exponential growth in 45 days in order to only cause doubts as the statement even if correct does not prove that the entity's existence and transactions are bogus. The assertion has been assailed as having been based on incorrect facts and suspicions. It has been stated that the period is 75 days and not 45 days and Padmesh Realtors being a subsidiary of the Suncity Group for whom the assessee was largely carrying out construction activity; the purchases as per arrangements were made from Padmesh Realtors as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction material sold to the assessee. In support of the said claim photo copy of NOC issued by M/s Kumar Ice Factory for allowing use of go-down premises at Patparganj along with PAN, IT Return etc. various other documents relied are found reproduced at pages 10 to 12 in para 4 of the impugned order and on the basis of these arguments and evidences the conclusion arrived at has been heavily relied upon in the course of the hearing by the Ld. AR and none of these documents it has been repeatedly emphasized have been assailed by the Revenue. In the facts as they stand as far as the existence of M/s Padmesh Realtors and the transactions recorded in the normal course of business being genuine it has been argued the Revenue's case has no merit. 8.2. It is seen that the Department has built its case on the statement of Mrs. Kamini Gupta the owner of Flat No. A-102 Dream apartments, Plot No. 14, Sector 22 Dwarka who is known to have stated that she does not know M/s Padmesh Realtors. As opposed to this statement not confronted to the assessee there is on record the NOC issued by the very same land lady for allowing the use of the very same flat for the business purposes of Pad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry or M/s Padmesh Realtors and on the contrary has consistently been described as a stranger by the assessee who has instead placed on record before the AO the correct address of M/s Kumar Ice Factory who had 2000 square meters of area which was allowed by the owner to be used as godown by M/s Padmesh Realtors for their storage of material. Since the statement of an unconcerned person and enquiry at the wrong address is the only basis of the allegation that M/s Padmesh Realtors did not have godown facilities the same has no relevance in the face of documents issued by Statutory Authorities listed in the impugned order and discussed at length in the earlier part of this order. In the absence of any contrary evidence, we find ourselves unable to come any other conclusion than the conclusion arrived at by the CIT(A). Being satisfied by the reasoning and fining on consideration of the material available on record the departmental arguments are rejected. 8.4. The Revenue in the course of the arguments has also placed heavy emphasis reliance on the allegations of the AO that how the goods were moved from the go-down facilities of M/s Padmesh Realtors to the assessee has not been addre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns allegedly issued to these 23 parties except for Ishwar Sons Timbers return unserved as only Ishwar Sons from whom purchases of about ₹ 50,000 were made only confirmed the transaction directly to the department. The confirmed copies of all these 23 entities filed by the assessee before the AO alongwith their addresses copies of Revenue filed invoices; the payments received through cheque; VAT, Sales Tax Registration PAN, TIN number have all been ingorned on the plea that these 22 entities out of 23 did not respond to the summons issued as they were returned with the comment that no such company/entity found. Further the filing of these documents by the assessee without the AO specifically calling forth for the same it has been aruged suggested close proximity with assessee as such the documents were neutral . As opposed to the said arguments the assessee has consistently assailed the stand of the Assessing Officer on the ground that the summons stated to be issued to the entities which allegedly came back unserved with the comment no such concern found may not have much relevance as nothing has been brought on record by the Revenue to show that at what addresses the allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of M/s Shri Ganpati Sales, income tax return on Mr. Amit Sharma proprietor of the said concern for 2008-09 assessment year along with confirmed copy of account PAN ledger account, bank statement of M/s Padmesh Realtors etc has been filed as such all necessary particulars were available. Coming to the third entity enquired namely M/S R. V. Mercantile Pvt. Ltd., the address of the said concern as per the assessment could not be located in regard to the same the assessee has contended that the AO has disbelieved the existence of the said concern on the belief that the company has not given proper address but no efforts as per record were made to obtain the correct address on the contrary the assessee has been petitioning the Assessing Officer that in case any further evidence is required, he may be called upon to do so which fact has not been assailed by the Revenue. It is seen that in support of the claim that it is a genuine concern a copy of VAT return financial year 2007- 08 has been filed; sale invoices issued to M/s Padmesh Realtors along with confirmed copy of account with PAN for F.Y 2007-08 , 2008-09 have been filed; along with bank statement of M/s Padmesh Realtors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which stands unrebutted. Being satisfied by the reasoning and the finding on considering the material available on record the finding of the CIT(A) is confirmed. The arguments that signatures in invoices apper to be different is not backed by any document in support of the claim. Similarly the arguments that non-production of the directors of 23 entities from whom goods were purchased by Padmesh Realtors which were further sold to the assessee cannot be a ground to ignore the evidence available on record as not only the assessee has successfully demonstrated that no such requirement was ever communicated to it but even otherwise the occasion to call the assessee to produce the suppliers of the supplier does not arise. The onus placed upon the assessee stands discharged. The departmental arguments why certain documents were not found during the search has no merit and stands responded to as it is not for the assessee to suggest which documents should be seized. Similarly the functioning of Padmesh Realtors from a residential address for a certain period of time authenticated by Statutory documentation whatever it may lead to most definitely does not lead to the conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
