TMI Blog2019 (5) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... d the genunity of purchases on the bills submitted, which goes against the theory of bogus purchases as held by the AO and cannot be sustained and, therefore, we are inclined to allow this ground of appeal of the assessee and confirm the action of the CIT(A) to the partial relief granted by him and direct the AO to allow claim of expenditure of the assessee incurred for purchases from M/s. SRDL and M/s. KIPL. Thus, the assessee succeeds and the revenue fails in this ground. Addition for payment made to M/s SREI Infrastructure Finance Ltd. - HELD THAT:- We note that M/s. SREI is regularly filing its returns with the Registrar of Companies and the payments have been made by the assessee to M/s. SREI by account payee cheques or through RTGS. Taking note of all these facts and taking note of the fact that the inconsistency/mismatch highlighted by the AO has been also rightly addressed by the Ld. CIT(A) in the form of a chart placed at page 26 of his order and the Ld AR, pain stakingly took us through the Paper-book and explained to us and reconciled the figures before us. - Decided against revenue - ITA No.25/Jodh/2019, ITA No.122/Jodh/2019 - - - Dated:- 10-5-2019 - Shri N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 11.04.2008 and is engaged in the business of civil construction, sub-contractor and road contractor and the assessee has declared total income of ₹ 22,89,70,040/-. The AO noted that the assessee has made huge payments to M/s. Sundha Road Developers Ltd. (hereinafter referred to as SRDL ) to the tune of ₹ 18,18,34,000/- and M/s. Khush Infratech Private Limited (hereinafter referred to as the KIPL ) to the tune of ₹ 18,10,85,268/- and M/s. Hari Laxmi Infra Project Pvt. Ltd. (hereinafter referred to as the HLIPPL ) to the tune of ₹ 4,42,00,000/- during the relevant assessment year. It is noted that no adverse view has been taken against the purchases made from M/s. HLIPPL which the AO referred to TPO u/s.92CA of the Act to compute arms length price in relation to the specified domestic transaction aggregating to ₹ 6,12,90,000/-; whereas the TPO vide order dated 28.08.2007 was of the opinion that no adverse inference need to be drawn in respect of the arms length price of the domestic transaction conducted by M/s. HLIPPL and the AO has not made any adverse view against the said company. Coming to the adverse view taken by the AO aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee by deleting the addition made by the AO on account of bogus purchases shown from M/s. SRDL to the tune of ₹ 6,66,210/- and in respect of M/s. KIPL to the tune of ₹ 3,73,690/-. At this juncture, we note that an amount of ₹ 1,71,95,000/- credited on account of cheque received by the assessee from M/s. SRVL since was borne out from the records, the Ld. CIT(A) has deleted the same on which the revenue is not in appeal. Aggrieved, by the action of Ld CIT(A), both parties are in appeal before us, raising the grounds supra. 7. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee company was incorporated on 11.04.2008 and is engaged in the business of civil construction, sub-contractor and road contractor and claimed to have purchased materials for its construction/road contracts from M/s. SRDL M/s. KIPL and M/s. HLIPPL, which the assesseehad claimed as its expenditure. The AO in order to ascertain the veracity of the claim of expenditure had issued notice to the parties involved directly u/s. 133(6) of the Act for necessary verification of the purchases made from these parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) Copy of computation of total income and audited Balance Sheet of M/s. SRVL submitted directly to the AO in response to notice u/s. 133(6) available at paper book pages 124 to 131 and 132 to 134. vi) Copies of specimen bills of purchase made available at paper book pages 47 to 84, vii) Payments made by account payee cheques for purchasing the material for the road construction. In respect of M/s. KIPL the following documents were filed: i) The account statement of the said party from the books of account of the assessee available at paper book pages 5 to 86, ii) The account confirmation and the account statement from the books of M/s. KIPL confirming the transaction with the assessee available at pages 87 to 90 of the paper book, iii) Copy of computation of total income and audited Balance Sheet of M/s. KIPL which was directly submitted to the AO in response to the notice u/s. 133(6) available at paper book pages 135 to 143 and 144 to 147. iv) Copies of specimen bills of purchase made by the assessee, Payments made by accouhnt payee cheques and purchases are for construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Ld. CIT(A) to the partial relief granted by him and direct the AO to allow claim of expenditure of the assessee incurred for purchases from M/s. SRDL and M/s. KIPL. Thus, the assessee succeeds and the revenue fails in this ground. 9. The next ground of appeal of the revenue wherein the Ld. CIT(A) ordered deletion of addition of ₹ 35,42,12,560/- which was added by the AO for payment made to M/s SREI Infrastructure Finance Ltd. (in short M/s SREI). The AO during assessment proceedings noted that the assessee has claimed advisory service expenses which was paid to M/s. SREI of ₹ 35,42,12,560/-. In order to verify its veracity of the claim, the AO issued notice u/s. 133(6) of the Act dated 13.10.2017 which AO agrees that M/s. SREI replied vide letter dated 22.12.2016 which according to AO was not complete, so he again issued notice and asked M/s. SREI to furnish copy of the Income tax Return, complete details of projects for which it has provided/rendered advisory services to the assessee, the advisory fee received in respect of relevant assessment year, party wise complete details of such advisory services provided by it during the assessment year e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (SEZ), Bangalore Metro Railway Corporation, Delhi Metro Development Corporation, Greater Vishakapatnam Municipal Corporation etc. It was brought to our notice that M/s. SREI was instrumental in getting various Government contracts to assessee company and helped in filing the tender, making detailed evaluation of the cost and requirements etc. It was also brought to our notice that M/s. SREI provides complete technical support while completing the projects awarded to it. In order to counter the allegation of AO that it was a bogus transaction, our attention was drawn to account statement of M/s. SREI placed at page 22 of the paper book, copy of invoice raised by M/s. SREI towards advisory services which are found placed at pages 23 and 24, copy of TDS certificate issued to M/s. SREI for payment of TDS on the payments made is found placed at pages 25 to 26, copy of the agreement executed with M/s. SREI is found placed at pages 27 to 31 of the paper book. M/s. SREI s audited balance sheet for the year ending 31.03.2014 and 31.03.2015 are found placed at pages 32 to 37, copies of report issued by M/s. SREI to the AO are also enclosed. We note that M/s. SREI is regularly filing its re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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