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2015 (3) TMI 363 - AT - Income TaxDisallowance of alleged bogus purchases - case setup by the Assessing Officer that the purchase of steel, etc. made from the said 11 parties was in-genuine - CIT(A) accepted purchases made from five parties - Held that:- Confirmation of the structural engineer, a copy of which has been placed in Paper Book at page 79 does not elaborate as to the time period in which the consumption of steel has taken place. Moreover, at the relevant point of time, multiple projects of the assessee were under construction and there is no material to co-relate as to whether at the time when the impugned purchases were effected any projects were being carried out. Therefore, the action of the CIT(A) in holding the purchases effected from six parties as bogus is affirmed. For remaining purchases made from five parties accepted by CIT(A)we find that the Assessing Officer did not carry out any third party verification as he had undertaken with respect to the six parties discussed earlier. It was only on the basis of the documents put-forth by the assessee that purchases from the said parties have been held to be bogus. Notably, assessee had furnished the invoices raised by the said parties and had also explained that all the payments were made by the cheques. Assessee had also furnished their sales-tax numbers. With respect to the transportation, assessee had explained that the responsibility of transportation was of the supplier and therefore assessee could not produce the transport receipts. The explanations put-forth by the assessee were not subject to any enquiry or verification by the Assessing Officer but have been merely disbelieved. The Assessing Officer, in our view, was influenced by the outcome of enquiries made with respect to the other six parties. However, in the absence of any material on record to negate the position canvassed by the assessee with respect to the said five parties, the explanation of the assessee could not be disbelieved. - Decided partly in favour of assessee. Disallowance of deduction u/s 80IA(4) - profits derived from the Industrial Park 'Giga Space' - Held that:-considering the amendment of rule 18C of the Rules made w.e.f. 01.08.2008 where an undertaking begins to develop an Industrial Park is also eligible for the deduction so long as the development is otherwise complete within the period specified in the Scheme as well as it fulfills the conditions envisaged in the Scheme. Therefore, in our view, there is no justification for the denial of deduction nu/s 80-IA(4)(iii) of the Act in the instant assessment year with regard to the profits earned by the assessee from Industrial Park - Giga Space of ₹ 33,59,56,749/-. Thus we set-aside the order of the CIT(A) and direct the Assessing Officer to allow the deduction made u/s 80-IA(4)(iii) of the Act of ₹ 33,59,56,749/-. - Decided in favour of assessee. Unrecorded payments - Held that:- Seized documents reflected investments made by the assessee for purchase of lands over and above the amounts declared in the regular books of account. Before us, assessee has reiterated the submissions made before the lower authorities, however, the income-tax authorities have co-related the amounts recorded in the seized material with the transactions of land at Jambhe and therefore, the unexplained investment stands established. Therefore, in-principle, we uphold the stand of the income-tax authorities in making an addition of ₹ 99,00,000/- u/s 69C of the Act. - Decided in favour of revenue. Eligibility of Industrial Park and Special Economic zones for benefits under section 80-IA(4)(iii) - Held that:- In the present case also, when assessee filed an application with the Central Government for registration of its Industrial Park under the Industrial Park Scheme, 2002, the said scheme had come to an end as it was applicable only upto March 31, 2006. It is also an admitted fact that the Industrial Park setup by the assessee was not operational/functional by March 31, 2006, as the date of completion of the said Industrial Park is stated to be 25.04.2007. Therefore, in our considered opinion, assessee cannot claim the benefit of the Industrial Park Scheme, 2002. In the absence of the notification mandated by section 80-IA(4)(iii) of the Act, the claim of the assessee for deduction u/s 80-IA of the Act in relation to its project E - Space has been rightly denied by the incometax authorities. The aforesaid action of the lower authorities is hereby affirmed and assessee fails on this Ground - Decided against assessee. Disallowance of brokerage paid - Held that:- The assessee has also paid service tax on the brokerage paid therefore, if the action of the assessee is to reduce the tax liability by paying brokerage to Regenesis PMCPL then such company would not have paid tax on the huge income declared nor the assessee would have paid service tax to the Government Account. Therefore, the allegation of the revenue that Regenesis PMCPL has offered NIL to nominal income and the assessee claimed the brokerage to reduce the capital gain tax also does not find much force.Expenditure on payment of brokerage to M/s Regencies PMCPL was an allowable expenditure - Decided in favour of assessee.
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