TMI Blog2019 (7) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... not have been achieved without actual purchase of the material. he assessee has placed on record the Income Tax Return as well as VAT returns for impugned AY 2008-09 in respect of Aster Teleservices Pvt. Ltd. which demonstrate that the entity was very well in existence. The assessee also made an effort to procure similar documents from official liquidator of another entity namely R.N. Infrastructure Pvt. Ltd. Nothing on record suggest that the above entities, in any manner, have been declared as Hawala / Bogus dealers by any of the authorities. The totality of all these facts demonstrate that the assessee was able to produce overwhelming documents to substantiate the purchase as pitied against the revenue s stand that notices u/s 133(6) were not responded to. However, we find that even the response to notice u/s 133(6) was not within the control of the assessee and the same were to be replied to by the third party suppliers. The factual matrix as well as documentary evidences, in our opinion, was tilted more in favor of the assessee. - appeal of revenue stands dismissed - I.T.A. No.5955/Mum/2017 - - - Dated:- 3-7-2019 - Shri Saktijit Dey, JM And Shri Manoj Kumar Agga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut vertical towers with equipment such as antennas, duplexers, transceivers etc. Towers could be ground based or roof based. 1.4 The return of income was filed by the assessee on 30/09/2009 declaring loss of ₹ 29.76 Crores which was later on revised on 22/03/2010 to ₹ 26.82 Crores. The loss was finally assessed u/s 143(3) on 29/12/2010 at ₹ 25.28 Crores. However, subsequently the case was reopened and an assessment was framed u/s 143(3) read with Section 147 on 25/03/2013 wherein the loss was reduced to ₹ 15.22 Crores. In the re-assessment proceedings, the assessee was saddled with disallowance of ₹ 10.30 Crores on account of purchases made from certain entities as per following details: - No. Name of the Party Amount (Rs.) 1. Aster (Aster Infrastructure Pvt. Ltd. Aster Teleservices Pvt. Ltd.) 6,23,80,569/- 2. R.N.Infra Communications Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Confirmation of Aster Teleservices Pvt. Ltd. and reconciliation thereto (iii) Confirmation of R.N.Infra and reconciliation thereto (iv) Copies of sample invoices raised by Aster Infrastructure Pvt. Ltd. providing services of survey site survey, soil testing, design drawing, liasioning etc. (v) Copies of sample invoices raised by Aster Teleservices Pvt. Ltd. on account of supply of material services (vi) Copies of sample invoices raised by R.N.Infra on account of supply of material services (vii) Supporting evidences by way of excise invoice copy, lorry receipt, material receipt note, proof of insurance, purchase orders and details of payment in respect of five invoices The trail of material received by the assessee against sample invoice no. SHD18NV035 dated 26/11/2007 raised by Aster Teleservices Pvt. Ltd. was demonstrated on the strength of material purchase order, invoice-cumchallan, copy of invoice indicating supplier s CST, TIN APGST No., excise invoice bearing transporter s details, evidence as to payment through banking channels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments. After taking into consideration, the A.O's findings and the appellant's oral and written submissions made during the course of hearing as well as facts of the case, decision on various grounds are adjudicated as under: 22. Ground Nos. 1 to 4 22.1 Vide these grounds the appellant has agitated against disallowing deduction of ₹ 1,54,57,360/- out of purchase of tower infrastructure. The appellant filed the return of income for A.Y.2008-09 on 30.09.2008 declaring a loss of ₹ 29,76,99,510/-. Subsequently revised return was filed on 22.03.2010 declaring loss of ₹ 26,82,78,992/-. Assessment u/s.143(3) was completed on 29.12.2010 at a loss of ₹ 25,28,21,632/- in which material purchased from Aster Infrastructure P. Ltd., Aster Teleservices P. Ltd. and RN Infra Communication P. Ltd. was treated as bogus. Thereafter the case was reopened u/s.147 of the Act and assessment u/s.143(3) r.w.s. 147 was passed on 25.03.2013 assessing the total income of the appellant at a loss of ₹ 15,22,08,910/-. Being aggrieved the appellant preferred an appeal before the ld.CIT(A)-16. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and vendor confirmation in respect of Aster Infrastructure P. Ltd., Aster Teleservices P.Ltd. and RN Infra Communication P. Ltd. Sample copies of invoices were also furnished before the A.O. The letter submitted by the appellant is placed at page 58 of the paper book which bears the stamp of the DCIT 9(1)(2) also. 22.4 During the course of assessment proceedings, confirmed copies of accounts of Aster Infrastructure P. Ltd. and RN Infra Communication P. Ltd. alongwith sample copies of invoices were furnished by the appellant. During the course of appellate proceedings, the following documents were produced: (i) Confirmation of Aster Infrastructure Pvt. Ltd (earlier - Ascend Telecom Infrastructure Pvt Ltd) and reconciliation thereto; (ii) Confirmation of Aster Teleservices Pvt. Ltd (State-wise) and reconciliation thereto; (iii) Confirmation of RN Infra and reconciliation thereto; (iv) Copies of sample invoices raised by Aster Infrastructure Pvt. Ltd. providing services of site survey, soil testing, design drawing, liasioning etc; (v) Copies of sample invoices raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22.5 Regarding noncompliance of notices u/s.133(6) by Aster Teleservices P. Ltd. it was submitted that the above-mentioned company went into liquidation and as a result its office was taken by the official liquidator. In support of the genuineness of Aster Teleservices P. Ltd. the appellant submitted the acknowledgement receipt of income tax return for A.Y.2008-09: It was further contended that for A.Y.2008-09 Aster Teleservices P. Ltd. it declared total income of ₹ 89,68,66,830/- and it had paid taxes of ₹ 30,57,52,014/-. In view of these financial results, the appellant claimed that Aster Teleservices P, Ltd. cannot be a hawala operator. It was further contended that transactions with Aster Infrastructure P. Ltd., Asther Teleservices P. Ltd. and RN Infra Communication P. Ltd. were also made in A.Y.2009-10 and these transactions were liable to excise duty, sales tax and service tax and TDS at applicable rates were deducted by the appellant. 22.6 The appellant has also brought to my notice that during the year appellant earned lease rent of ₹ 1,63,82,64,191/-. The receipts were accepted by the department. It means that the existence of tower has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Ltd., the disallowance of depreciation made by the A.O. is deleted and the appeal of the appellant is allowed. Aggrieved, the revenue is in further appeal before us. 4. The Ld. CIT-DR, Shri Anadi Verma pointed out that critical documentary evidence viz. notices sent u/s 133(6) to the concerned suppliers, even during remand proceedings were not responded to and the assessee could not produce any of the supplier to confirm the transactions which establishes that the purchases were not genuine. It has been submitted that the onus to prove the purchases beyond doubt remained undischarged by the assessee and Ld. first appellate authority, without making any further inquiries or verifying the documents, provided relief to the assessee which was not justified in the given circumstances. Reliance has been placed on following judicial pronouncements to support the submissions: - No. Title Judicial Authority Citation 1. CIT Vs Jansampark Advert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2 As against the above, we find that the assessee had filed plethora of documents to substantiate the purchases, which have already been enumerated by us in para 3.1 above. It is noted that the three suppliers under question were corporate entities who were duly registered under respective State Sales Tax / VAT, had registration under Excise Laws / Service Tax. The material was purchased by the assessee against C Form. The proof of insurance of the material was placed on record. The purchases were backed by excise invoices which carried transporter s details. The assessee demonstrated trail of purchased material on sample basis with respect to the suppliers. The assessee has obtained certain services from these entities and made the payment thereof after deduction of appropriate tax at source u/s 194 C / 194J. All the payments were through banking channels. The confirmation of account as well as reconciliation of balances was available on record. Further, similar purchases made by the assessee in subsequent AY 2009-10 has been accepted. The assessee erected approx. 610 new Towers during the year which was uniquely identifiable and the same could not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, from the order of the Tribunal dated 30-04-2010, we find that the Tribunal has deleted the additions on account of bogus purchases not only on the basis of stock statement i.e. reconciliation statement, but also in view of the other facts. The Tribunal records that the Books of Accounts of the respondentassessee have not been rejected. Similarly, the sales have not been doubted and it is an admitted position that substantial amount of sales have been made to the Government Department i.e. Defence Research and Development Laboratory, Hyderabad. Further, there were confirmation letters filed by the suppliers, copies of invoices for purchases as well as copies of bank statement all of which would indicate that the purchases were infact made. In our view, merely because the suppliers have not appeared before the Assessing Officer or the CIT(A), one cannot conclude that the purchases were not made by the respondent-assessee. The Assessing Officer as well as CIT(A) have disallowed the deduction of ₹ 1.33 crores on account of purchases merely on the basis of suspicion because the sellers and the canvassing agents have not been produced before them. We find that the order of ..... 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