Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (10) TMI 806 - ITAT MUMBAI

2016 (10) TMI 806 - ITAT MUMBAI - TMI - Genuineness of expenditure - expense of dismantling, loading, unloading and assembling charges for movement of the crawler crane - Held that:- The background is that the said crane so acquired by the assessee was owned by Janak Cranes and was installed at Maithan Power Project at Jharkhand on hire to Simplex Infrastructure Limited vide work order dated 22/25-05-2009. The assessee acquired the crane as on where basis from Janak Cranes along with work order .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee. - The assessee is not coming out with the true and correct facts to reflect the true character of the said transaction and payment thereof and in our view prima facie it appears that this payment of ₹ 25,00,000/- is connected with the purchase of the crane but the assessee is not coming out with the true and correct facts - matter remanded back for re-determination of the issue on merits - Decided partly in favor of assessee. - I .T.A. No.5673/Mum/2014 - Dated:- 14-9-2016 - SHRI .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d CIT(A) arising from the assessment order dated 18th December, 2012 passed by the learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income Tax Act,1961 (Hereinafter called the Act ). 2. The grounds of appeal raised by the assessee company in the memo of appeal filed with the Income Tax Appellate Tribunal, Mumbai (hereinafter called the Tribunal ) read as under:- 1. On the facts and in the circumstances of the case and in law, the learned Assessing Officer -ACIT -10(2), Mu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndition at site with all its accessories for a consideration of ₹ 7.20 crores for which necessary invoice were submitted. The assessee Company has furnished a proof in the form of invoice raised on Janak Cranes for the hiring charges earned for the period from 8th Feb 2010 to 28th Feb 2010 and 1st March 2010 to 31st March 2010 by putting above referred crane into actual use. The assessee Company has claimed to have incurred an expenditure of ₹ 25,00,000/- towards dismantling, loading .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purchased and since the crane is a crawler crane and cannot travel on road it has to be transported on various trailers and trucks after dismantling into various parts and it will be loaded into various trailers for transporting from one place to another and for this, the said amount has been paid to Janak Crane for dismantling the crane into various parts and loading as well as unloading into trailers and assembling at other site. It was submitted that the expenses can be capitalized to asset .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t arise and it was rightfully considered as revenue expenditure. The crane has started working from 8th February, 2010 onwards for which the work order for the crane was in the name of Janak Cranes and has been changed in assessee company's name from April, 2010 onwards and hence the hiring bill for the month of Feb & March 2010 were raised on Janak Cranes itself. The assessee company was asked by the AO to justify the genuineness of the above expense. No details were provided by the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

It was submitted that the crane is a crawler crane and cannot travel on road and hence it has to be transported on various trailers and trucks. The crane has to be dismantled into various parts. For this purpose the amount has to be paid to Janak Cranes for dismantling the crane into various parts and loading as well as unloading into trailers and assembling at other location of the same site of Maithan Power Project, Jharkhand . The assessee has submitted the following documents to substantiat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by the assessee company & Janak Cranes for change of work-order dated 22.02.2010. 7) TDS Certificate issued by the assessee company for TDS deducted. 8) Ledger account of Janak Cranes for the financial year 2009-2010 & 2010-2011 reflecting the total transaction of bill, payment, TDS, Service tax etc. 9) Xerox copy of bank statement for payment of ₹ 25,00,000/- to Janak Cranes. The A.O. rejected the contentions of the assessee and observed that the assessee in its initial submission .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

have continued to raise invoice on the Janak Cranes till the end of March 2010 and subsequently from April 2010 they have raised invoice on the end user party Simplex Infrastructure Limited directly. It was observed that since the work order were in the name of Janak Cranes assessee has raised invoice on Janak Cranes and were able to get it changed in their name from April, 2010 onwards is proving clearly that assessee had continued operating the said crane at the same site at Maithan Power Pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

order to M/s Simplex infrastructures Limited to be replaced in favour of the assessee company. Similarly on 22nd February, 2010 the assessee also wrote to M/s Simplex Infrastructures Ltd. for the issuance of work order in their name. The A.O. accordingly came to the conclusion that the expenditure claimed by the assessee on account of loading and unloading charges is non-genuine which is evident from the work order and an amount of ₹ 25 lacs was disallowed as business expenses and added t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

te Jharkhand which was in use at the site itself. The work order dated 22nd May, 2009 issued by M/s Simplex Infrastructures Limited indicate that the work connected to Maithon Power Project site, Jharkhand was awarded to M/s. Janak Cranes and the hire charges for the crawler was fixed at ₹ 16.5 lacs per month. The assessee claimed that the above crane was purchased on 5th February, 2010 along with all its accessories from Janak Cranes at Maithon Project site itself. The ld. CIT(A) observed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

such a heavy crane into various parts, then loading in the trailers, transportation, unloading and finally reassembling at the new site was not possible within a short period of two days. It was observed that the work order given to Janak Cranes was in respect of Maithan site at Jharkhand, whereas the description in the invoice shows Kolkatta site and hence there is a contradiction in the assessee s claim. Vide letter dated 22nd February, 2010 for the first time M/s. Janak Cranes addressed a le .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t have been put into use in the month of February and March 2010 by the assessee. With respect to the expenditure related to transportation, dismantling etc. was paid to M/s. Janak Cranes, the assessee was directed to file the copy of the invoice raised in support of the contention that the payment towards the dismantling, transportation etc. was genuine. The ld. CIT(A) held that the date of sale vis-a-vis the date of invoice raised in respect of dismantling, transportation etc. compared to 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

mines dismantling, transportation by hiring the trailers and reassembling would definitely be an impossible event in two days considering the huge size of the crane. Considering all these facts, the entire transaction is definitely sham and it is a colourable device to claim a bogus expenditure, hence, the entire claim of payment made Rs . 25 lakhs was treated as non genuine and therefore the addition made by the AO was upheld/sustained by learned CIT(A) vide appellate orders dated 26-06-2014. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d the said crane to M/s Simplex Infrastructure Ltd. who were contractors for Maithan Power Project at Jharkhand. It was submitted that the said crane was dismantled and transported to other location at the same site and assembled therein and the assessee paid charges of ₹ 25,00,000/- + service tax to Janak Cranes for said movement of crane . The payment was made by crossed account payee cheque on 19-01-2010 against which tax was also deducted at source and invoice was also received from Ja .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly rental of ₹ 16.50 lacs(pb/page 11-14).The said work order was changed by Simplex Infrastructure Limited in favour of the assessee vide LOI dated 26-03-2010 on the same terms and conditions which is placed in paper book page 15-18, in pursuance of request letter written by Janak Cranes(pb/page 8 ) and the assessee (pb/page 7) both dated 22.02.2010 to Simplex Infrastructure Limited to transfer the work order in favour of the assessee. It was submitted that for the interim period from 08-0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mobilization of cranes by de-assembling, transportation and assembling at another location with in the same site of Maithan Power Project at Jharkhand as not genuine and treating the same transaction as sham and colorable device. Thus, it was submitted in nut-shell that the said expenses of ₹ 25,00,000/- ( exclusive of service tax amount which is claimed as cenvat credit by the assessee ) for dismantling , transportation and re-assembling of the crane at a different location within site 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

s for ₹ 7,20,00,000/- vide invoice no. 078 dated 02-03-2010 of Janak Cranes(paper book/page 4) although payments were stated to be made through HDFC Bank Loan-3314541 on 2-3-2010 as per ledger account submitted(page 1/pb), wherein on perusal of the ledger account of Janak Cranes submitted by the assessee , the invoice depicted in ledger account is invoice no 76 dated 01-02- 2010 for ₹ 7,20,00,000/- for purchase of Kobelco Crawler Crane Sr. No. JD04-02407 with complete accessories. Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted directly w.e.f. 01-04-2010 onwards. The background is that the said crane so acquired by the assessee was owned by Janak Cranes and was installed at Maithan Power Project at Jharkhand on hire to Simplex Infrastructure Limited vide work order dated 22/25-05-2009. The assessee acquired the crane as on where basis from Janak Cranes along with work order for hiring by Simplex Infrastructure Limited at the same site/location and continued with the said crane on hire to Simplex Infrastructure Limi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

anak Cranes for the said deassembly, transportation and re-assembly of the said crane i.e for demobilization and mobilization of the said crane at new location at the same site for which no evidence whatsoever is available on record and this contention of the assessee cannot be accepted and is hereby rejected. However, if we consider the entire sequence of event in totality , it prima facie emerges that the assessee initially paid ₹ 25,00,000/- to Janak Cranes on 19-01-2010 which appears p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| 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