TMI Blog2017 (3) TMI 1710X X X X Extracts X X X X X X X X Extracts X X X X ..... versy after considering the case of the assessee from every angle. Nothing came into the notice that the finding of the CIT(A) is required to be interfere with. In view of the discussion made above we are of the view that the CIT(A) has passed the order judiciously and correctly which does not require to be interfere with at this appellate stage. - Decided against revenue. - I.T.A. No.5243/Mum/2013 - - - Dated:- 31-3-2017 - SHRI RAJENDRA, AM AND SHRI AMARJIT SINGH, JM For the Appellant : Shri Vishwas Mundhe For the Respondent : Shri Bhupendra Shah ORDER PER AMARJIT SINGH, JM: The assessee has filed the present appeal against the order dated 10.05.2013 passed by the Commissioner of Income Tax (Appeals)-35, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y.2010-11. 2. The revenue has raised the following grounds:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A), erred in deleting the addition of ₹ 4,99,27,664/- which was made by invoking the provisions of section 69C of the Income Tax Act, 1961, by treating the purchase are non-genuine. 2 On the facts and in the circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer be restored. 3. The brief facts of the case are that the assessee filed his return of income declaring total income to the tune of ₹ 37,60,430/- on 20.09.2010. The return of income was processed u/s.143(1) of the Income Tax Act, 1961 ( in short the Act ). Thereafter, the case was selected for scrutiny under CASS. Notice u/s.143(2) of the Act was issued on 25.08.2011. Consequent to the change of incumbent in office, fresh notice u/s.142(1) of the Act along with detailed questionnaire was issued on 09.07.2012. The assessee was an individual and was a civil contractor. The assessee purchased the material from 21 parties amounting to ₹ 4,99,27,664/-. These parties were suspicious dealers and were issuing the bills without delivery of any goods or material for commission. Therefore, show cause notice was given and notice u/s.133(6) of the Act were issued. The notices were served. However, the official of the Income Tax Department visited the spot and found that no business was running there. The assessee failed to produce the parties for verification. It was incumbent upon the assessee to establish genuineness of the purchases but the assessee failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 M/s. Mahavir EnterpriseD-102, Dharma Nagar, Yogi Nagar, Off. Link Road, Borivali (W) Mumbai 400 091 26,34,187 11 M/s. Navdeep Trading Corporation 120/124, C.P.Tank Naka, 1st Floor, V.P.Road, Mumbai 400004 5,97,467 12 M/s. Niddish Impex Pvt. Ltd. 52/54 V.V.Chandan St., Babu Bhavan, 1st Floor, Masjid Budnder, Mumbai 400003 25,01,163 13 M/s. Om Corporation Nanakbhi Wadi, Ram Padarth Bhavan, M.L.P. Road, Mulund(E), Mumbai 400 087 13,20,001 14 M/s. Riddhi Siddhi Enterprises 30 Dwardesh, 2nd Floor, Modi Patel Road, Bhayander (W) Thane- 401101 31,35,102 15 M/s. Rohit Enterprise Om Sai Baba Nagar, Room No.1, Janta Nagar Road, Near Sargam Apt., Bhayander (W), Thane 401101 25,08,517 16 M/s. Shree Sai Trading Co. 6/2 Madhav Niwas, Ram Mandir Road, Bhayander (W), Thane 400067 19,35,147 17 M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed his burden, the subsequent burden shifts to the Assessing Officer to disprove the claim of the appellant. Therefore, there is a substantial force in the contention of the appellant that the Assessing Officer has erroneously treated the same as unexplained expenditure. I have also observed that the payments are made by account payee cheques as reflected in the bank statements of the appellant and has been credited to the bank accounts of the suppliers. Therefore, this contention of the Assessing Officer does not hold good that account payee cheque is not a good proof, particularly in absence of any further finding that the said account payee cheques have not reached the said supplier. I have also observed that the only basis of the disallowance by the Assessing Officer. There is a force in the argument of the Authorized Representative that suspicion however strong, cannot form the basis of assessment. Moreover, it is further seen that, the payments have been made from the disclosed bank account of the appellant and therefore the same cannot be treated as unexplained expenditure. Accordingly, without any cross-examination of the said suppliers, the Assessing Officer could not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also a force in the contention of the appellant that contractile clients are subjected to several inspections in their office by different engineers and authorities. The Assessing Officer has never disputed the completion of contract as per the stipulation of the clients of the appellant. Therefore, on one hand, the Assessing Officer has accepted the correctness of the contracts executed by the appellant. On the other hand, he has disallowed a huge sum of ₹ 4,99,27,664/- only on the basis of information on the MVAT website and merely on suspicion. On the totality of the facts and the case laws relied upon by the appellant, I am of the considered view that the disallowance made by the Assessing Officer is not tenable in law because income tax is a tax on real income. Moreover, I am also of the opinion that the disallowance of the whole amount of ₹ 4,99,27,664/- u/s.69C would result into abnormally high GP and NP of the appellant which is unrealistic in any line of contract as being executed by the appellant. I am therefore, inclined to agree with the appellant and the disallowance of ₹ 4,99,27,664/-. Accordingly, first six grounds of appeal are allowed . 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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