Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s Yashowardhan Promoters & Developers Pvt. Ltd. Versus Dy. Commissioner of Income Tax,

2015 (5) TMI 750 - ITAT PUNE

Bogus purchases - CIT(A) deleting the addition - Held that:- As relying on precedent of assessee's own case 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ith respect to the said five parties, the explanation of the assessee could not be disbelieved. Under these circumstances, in our view, the CIT(A) made no mistake in deleting the addition with respect to the aforesaid five parties. As a consequence, on this aspect Revenue fails - Decided in favour of assessee. - ITA No.1418/PN/2013, ITA Nos.1475 to 1477/PN/2013 - Dated:- 18-3-2015 - Shri G.S. Pannu And Ms. Sushma Chowla JJ. For the Appellant : Mr. Nikhil Pathak For the Respondent : Mrs. Mitali M .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ant to appreciate the background of the dispute is that the assessee company belongs to M/s Kolte Patil Developers Ltd. group cases wherein a search action u/s 132(1) of the Income Tax Act, 1961 (in short the Act ) was conducted in course of which, Department made enquiries with some of the parties who had supplied steel and other material to the assessee as well as to other group companies belonging to M/s Kolte Patil Developers Ltd. group of cases. On the strength of such enquiries carried out .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tal Trade Corporation; (iii) Yash Trading & Co.; (iv) M/s Shri Surya Steel; and, (v) M/s Satyam Steel were also bogus. In the case of M/s Kolte Patil Developers Ltd. vide ITA Nos.1411 to 1415/PN/2013 dated 20.02.2015, the Tribunal has dealt with an identical controversy, inter-alia, purchases made from the aforesaid eleven parties which held to be bogus by the Assessing Officer. It was a common point between the parties that the issues raised in the captioned appeals are covered by the decis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ax (Appeals)-II, Pune dated 28.03.2013 which, in turn, has arisen from order dated 31.12.2010 passed by the Assessing Officer u/s 143(3) r.w.s. 153A of the Act respectively. 4. In assessment year 2007-08, the Assessing Officer, following his stand in the other assessees of the Kolte Patil Developers Ltd. group, held that purchases made by the assessee from the following three suppliers were bogus : (i) Parky Mercantile Pvt. Ltd. - ₹ 13,30,352/-; (ii) Shree Surya Steel - ₹ 10,34,479/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

10,34,479/- and ₹ 10,65,080/- respectively. The assessee and Revenue have challenged the action of the CIT(A) in their respective - assessee has challenged the sustenance of addition of ₹ 13,30,352/-, whereas Revenue has challenged the deletion of addition of ₹ 20,99,559/-. It was also a common point between the parties that the impugned decision of the CIT(A) is similar to his decision in the case of M/s Kolte Patil Developers Ltd., which was a subject-matter of consideration .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

carefully considered the rival submissions. In sum and substance, the dispute is with regard to the purchases claimed to have been effected by the assessee from the aforesaid 11 parties. The case setup by the Assessing Officer is that the purchase of steel, etc. made from the said 11 parties was in-genuine and therefore an amount of ₹ 7,75,34,092/- representing purchases effected from such parties has been disallowed while computing the total income. The reasons for the Assessing Officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he same has been held to be bogus based on the enquiries conducted by the Department in the post-search proceedings. Statements of the six parties were recorded u/s 131 of the Act, which elucidated that all of them denied of having made actual supply of goods to the assessee. In one of the cases, the Assessing Officer has also referred to the statement recorded of the Transporter wherein also it was confirmed by him that no actual transportation of goods was effected. The aforesaid adverse mater .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ques and that the purchases are evidenced by the bills raised by the said suppliers. Assessee also asserted that cross-examination of the said parties was not allowed to the assessee. 24. As per the Revenue, in the course of post-search investigations itself, Shri Rajesh Patil, CMD of the assessee-company was confronted on this aspect and was offered cross-examination of the said parties. It appears that the assessee did not avail of this opportunity as the CFO of the assesseecompany was not pre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e wrong or that they do not reflect the correct state of affairs. In this context, assessee has merely referred to the purchase bills issued by the suppliers and the cheque payments made. So however, there is no other evidence, namely, GRNs, octroi receipts, delivery challans, etc. which would show that the supplies were indeed made. Therefore, in such a situation, can the absence of cross-examination be fatal to the addition in question ?, especially when at the initial stage, an opportunity of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

w that the supplies were indeed made. 25. Now, the assessee has also referred to an affidavit of Shri Narendrakumar Timbodia, Prop. of Narendrakuma & Co. and partner of R.D. Jain & Co., wherein he confirmed that the purchases made by the assessee from him were genuine. This affidavit was obtained by the assessee only after the completion of assessment proceedings and was submitted to the CIT(A). The CIT(A) has admitted such additional evidence and on that there is no dispute. However, he .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f genuineness to the sale bills, they have prepared the Lorry Receipt of M/s New ARC Transport showing transportation of goods to the assessee. The aforesaid averment of the said person made in the course of post-search enquiries stood corroborated by the statement deposed by the Transporter, M/s New ARC Transport. In contrast, the affidavit furnished in the course of the appellate proceedings before the CIT(A) does not deal with the above circumstance and it does not even explain the reasons fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that the CIT(A) made no mistake. Therefore, on the aspect of the purchases effected from the six parties with whom enquiries were conducted during post-search period, the CIT(A) justifiably held such purchases as bogus. We hereby affirm his action, and assessee fails on this aspect. 26. Before parting on this issue, we may also touch-upon an alternate plea raised by the assessee with regard to the quantum of addition on this count. In this context, assessee pointed out that if the entire amount .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ow that the consumed quantity of steel was lower than the minimum required to undertake construction. Therefore, according to the assessee, the only presumption that can be withdrawn is that assessee had indeed effected the purchases. It was pointed out that on the failure of the assessee to substantiate the purchases, at best, the addition can be made with respect to the gross profit element corresponding to the amount of purchases but not the entire amount of purchase bills. The reliance has a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee that the quantity of steel corresponding to the impugned purchases has been consumed stands established or not ? The 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 purch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Mercantile Pvt. Ltd. as bogus is hereby sustained. 7. In so far as the cross-appeal of the Revenue is concerned, the Grounds of Appeal raised, read as under :- 1) On the facts and circumstances of the case, the Ld. Commissioner of Income-tax (A) erred in treating the bogus purchases of steel from five parties namely (a) Vora Mercantile Pvt. Ltd., (b) M/s Mayoora Metal Trade Corporation, (c) M/s Yash Trading Co., (d) M/s Shree Surya Steel, and (e) M/s Satyam Steel as genuine ignoring the materia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Steel - ₹ 10,34,479/- and M/s Mayoora Metal Trade Corporation - ₹ 10,65,080/- only; and, the other parties mentioned involve purchases effected in the balance captioned assessment years, i.e. 2008-09 and 2009-10. The Revenue has raised a common Ground of Appeal for all three captioned years. 9. On this aspect, the Tribunal vide its order dated 20.02.2015 (supra) affirmed the order of the CIT(A) and the relevant discussion is as under :- 28. Now, we may deal with the decision of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version