TMI Blog2016 (3) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... uppliers and when the Assessing Officer failed to discharge the onus as discussed above, the additions made u/s 69C amounting to ₹ 12,01,91,407/- out of total addition of ₹ 13.03 Crs is required to be deleted. CIT (A) is directed to examine this issue and pass a speaking order on the issues relating to the aspects of GP and the other independent addition of ₹ 1,00,86,929/- after gathering relevant facts from the survey statements, if any. CIT (A) shall grant a reasonable opportunity of being heard to the assessee as per the set principles of natural justice. - I.T.A. No.5296/M/2013 - - - Dated:- 10-2-2016 - SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER For The Appellant : Shri A.K. Jha, DR For The Respondent : Shri Sanjay Kapadia ORDER PER D. KARUNAKARA RAO, AM: This appeal filed by the Revenue on 31.7.2013 is against the order of the CIT (A)-35, Mumbai for the assessment year 2010-2011. In this appeal, Revenue raised the following grounds which read as under:- 1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in deleting the addition of ₹ 13,02,78,336/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Regarding the additions made u/s 69C of the Act, CIT (A) deleted the whole of the addition of ₹ 13.03 Crs (rounded off ). Aggrieved with the said decision of the CIT (A), Revenue is in appeal before us. 4. Relevant facts relating to the addition made u/s 69C of the Act include that during the assessment proceedings, AO called for the list of the purchases of the raw material ie cement, steel, bricks etc. AO issued noticed u/s 133(6) of the Act to the said purchasers. There was no response to the said letters. Eventually, AO found out that most of these parties ie suppliers of the said raw material, are listed by the Sales Tax Department in their website ie www.mahavat.gov.in as Sales Tax defaulters. Further, AO found out from the said list of the Sales Tax Department that 56 parties are figuring common in the list of parties, who supplied raw material to the assessee. The details of the said parties are provided in para 8.1 of the impugned order. Accordingly, AO, relying on the statement recorded by the Sales Tax Department and other documents supplied by them, treated the purchases made from these parties as bogus‟. The total of these purchases worked out to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8223;s order are relevant in this regard. For the sake of completeness of this order, the same are reproduced as under:- 8.10. All the above clearly indicates that material for the above contracts reached the respective site which got tested for its quality. Depending upon the stage of work running bills were prepared and payments received after certification by the Site Engineers. All these clearly prove that the contract work has been executed to the satisfaction of the MCGM authorities and due payments were received against the executed contracts. The Assessing Officer without examining the facts, discussed above, had come to the conclusion based only the presumption that because the names of the suppliers were put in the internet as suspicious dealers the purchases were bogus‟. Without purchase of material such as cement, steel, bricks etc, the appellant could not have completed the contract assigned to it. The Assessing Officer had no material on record to show that how the contracts have been completed by the appellant without purchase of materials from the above suppliers. The books of accounts of the appellant had been duly audited by the C.A., and no discrep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppliers. 9. On the other hand, Ld Counsel for the assessee heavily relied on the order of the CIT (A). Further, he submitted that the AO has erred in discharging the onus in matter of claims of the assessee. The fact that the contract was successfully done by the assessee to the satisfaction of the MCGM was ignored. The AO‟s decision in rejecting the purchases of the material (cement, steel, bricks etc) to the tune of ₹ 13.03 Crs (rounded of) disproved the fact of execution of the works and therefore the AO‟s decision is not sustainable. Regarding the decision of the Sales Tax Department in black listing 59 of the suppliers in their website, Ld Counsel for the assessee brought our attention to some decisions of the Tribunal such as (i) ITO vs. Shri Rajkumar Agarwal in ITA No.5233/M/2013 (AY 2010-2011) dated 10.4.2015; (ii) Ramesh Kumar Co. vs. ACIT in ITA No.2959/M/2014 (AY 2010-2011), dated 28.11.2014; Deepak Potatlal Gala in ITA No.5920/M/2013, dated 27.3.2015 and submitted that some of these so called black list suppliers were considered in those cases and the issues were decided in favour of the respective assessee‟s by holding that the AO failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pliers of the bills. It is an admitted fact that the purchases involving these 5 suppliers viz (i) Atmass Enterprises; (ii) Om Corporation; (iii) shree Sai Enterprises; (iv) V.K. Enterprise and (v) Virat Enerprises were offered as unaccounted ones in the past. During the survey action u/s 133A of the Act on 27.2.2012 (relevant for the AY 2012-2013), assessee offered the purchases made from the said parties in that assessment year as unaccounted ones. Logically, the purchases made from the similar parties for the AY under consideration works out to ₹ 1,00,86,929/- should not be considered as genuine purchases as they are undisputedly the bill suppliers only and not the material suppliers. 10. We have heard both the parties on this issue of addition made u/s 69C of the Act. We have also examined the aforementioned orders of Tribunal. We find, the decision, made in those cases adjudicated by the Tribunal (supra), is also based on the data available on the webpage of the Sales Tax Department. At least some of the parties are found figuring in the list supplied by the AO and the CIT (A). The Tribunal decided the appeals in the above mentioned cases (supra), after analysing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso from the bank of the suppliers to verify whether there was any immediate cash withdrawal from the account. No such exercise has been done. The ld CIT (A) has also confirmed the addition made by the AO by going on the suspicion and the belief that that suppliers of the assessee are Hawala traders. We also find that no effort has been made to verify the work done by the assessee from the Municipal Corporation of Greater Mumbai. We agree with the submissions of the Ld Counsel that if there were no purchases, the assessee would have been in a position to complete the civil work. 11. Further, regarding the GP maintained by the assessee, we find that the assessee declared GP rates of 10.56% (supra). AO has not examined the GP rate of the assessee over the years on similar contracts. Taking comparable cases, however, it is the claim of the assessee with the addition of ₹ 13.03 Crs, the GP rate has resulted to 21.38%, which is abnormally high on the fact of it in the contract works like the one executed by the assessee. Unfortunately, there is no reference to these aspects in the order of the AO and the CIT (A), despite the reference made by the assessee in his submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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