TMI Blog2015 (9) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... se four appeals filed by the same assessee are directed against different orders of the Commissioner of Income Tax (Appeals) II, Chennai all dated 28.03.2012 relevant to the assessment years 2005-06, 2006-07, 2007-08 and 2008-09. These appeals belong to same assessee are heard together and is being disposed of by this common order for the sake of brevity. Since common issue is involved in these appeals, we shall take up I.T.A. No. 1308/Mds/2012 for the 2 I.T.A. Nos Nos.1308 to 1311/M/ 1311/M/1 /M/12 assessment year 2005-06 as lead case. 2. Brief facts of the case are that the assessee company is carrying on business as developers and builders of residential units. There was a search and seizure action under section 132 of the Income Tax Act in the case of Shri P.K. Duraisamy, Managing Director of M/s. Kalai Constructions P. Limited on 13.03.2008. In the course of search proceedings in the residence of Shri P.K. Duraisamy, MD of the company, the materials inventorised as SN/B D/S-1, S-2, S-3, S-5, S- 8, S-9, S-10, S-11, S-12 dated 06.05.2008 were seized. Since these bundles contained cash receipts/vouchers for expenditure incurred by the assessee for purchase of constructions mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases were made from all these several parties viz. M/s.Sivaparvathi and Company, Coimbatore, Sri Saravana Hollow Block, R. Thirumurgan Co., Erode, Pongaliamman Chambers, Thirumurugan Lorry Service and Sri Ram Agency Erode and subsequently the payments have also been made to them. The assessee had further submitted that these are small time businessmen with no firm footing in any place and that they are likely to shift places without any intimation and could have also stopped business. The assessee also submitted that since they did not continue business with those three parties, they were not interested in knowing the present whereabouts of the parties. Lastly, the assessee company's Managing Director, Shri. P.K. Duraisamy had submitted that during the day of search, he could not vehemently argue this point due to natural fatigue and the confused state of mind. 4.1 The assessing officer, after considering the arguments of the assessee, did not accept the submissions of the assessee and the relevant portion of the assessment order is reproduced below: The sworn statement of Shri. P.K. Duraisamy confessing to the fact that the purchases are not true in nature was reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the assessee that the Managing Director was in a confused state of mind during the search on 13.03.2008 and therefore admitted inflation in expenditure cannot be accepted because its only while recording statement on 06.05.2008, the Managing Director had made the admission of inflation of expenditure. There is a sufficient time gap between the date of search and the date on which sworn statement was taken from the Managing Director. 4.4. A perusal of the statement of accounts submitted by the assessee with each of the Concerns viz. M/s.Sivaparvathi and Company, Coimbatore, Sri Saravana Hollow Blcok, R. Thirumurgan Co., Erode, Pongaliamman Chambers, Thirumurugan Lorry Service and Sri Ram Agency Erode shows that the transactions run into several lakhs. It is inexplicable that such traders will vanish overnight and will not produce confirmation, in case these transactions are genuine. Also personal visit by the Inspector of the Department confirms that these Concerns are not in existence. Therefore these evidences point out to the fact that the names of these Concerns were used by the assessee for making bogus purchase in these construction businesses. 4.5. The assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding audit report under section 44AB of the Act. It is also a fact that the assessee has completed construction work. Simply because some of the parties from whom the assessee has purchased materials are not available for verification, it cannot be said that the assessee has not purchased the material and no disallowance can be made. Alternatively, he has submitted that it is an admitted fact that the assessee has completed construction and without purchasing iron, cement, sand, wood, etc. he cannot complete the construction. Therefore, the assessee was in the process of quantifying the details vis-a-viz construction made by the assessee and submitted that he will submit all the details before the Assessing Officer and may be examined and decided afresh. 7. On the other hand, the ld. DR has submitted that so far as alternative ground is concerned, this has not been examined by the Assessing Officer and fairly accepted that the matter may be remitted back to the Assessing Officer. 8. We have heard both sides, perused the materials on record and also orders of authorities below. The issue involved in the appeal with regard to non-availability of some companies from whom the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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