TMI Blog2019 (7) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... 223;s transactions were genuine and therefore, the acceptance of the addition made before the Assessing Officer was an ad-hoc one. However, no such evidences were brought on record by the assessee. The entire scenario clearly reflects that the assessee knew that the transactions were not genuine and therefore, in order to buy peace of mind it accepted the addition before the AO and therefore, it in no circumstances, can be termed as ad-doc acceptance of the addition. It is rather well planed action on the part of the assessee. That further, the assessee with regard to the bogus purchases of machinery is only harping upon case laws but those judicial pronouncements have been decided based on specific evidences on record. In the instant case, the assessee as clearly seen from the records, has not brought in any evidences as to the fact of showing the genuineness of the transactions in respect of purchase of machinery. In view of the matter, we find no infirmity with the findings of the Ld. CIT(Appeals) and the additions made on bogus purchases of machinery and interest thereon on borrowed funds are upheld. Thus, ground No.2 raised in appeal by the assessee is dismissed. Nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER PARTHA SARATHI CHAUDHURY, JM : These cross appeals preferred by the assessee and by the Revenue emanates from the order of the Ld. CIT(Appeals)-2, Nashik dated 27.05.2014 for assessment the year 2010-11 as per the grounds of appeal on record. 2. These cases were heard together. Since issues common, facts are similar, these cases are being disposed of vide this consolidated order. First, we would take issues in assessee‟s appeal in ITA No.1434/PUN/2014 for adjudication. ITA No.1434/PUN/2014 ( By Assessee) A.Y.2010-11 3. Ground No.1 relates to the disallowance of expenses made u/s.14A r.w.s. Rule 8D of the Income Tax Rules, 1962. 4. At the time of hearing, the Ld. AR of the assessee vehemently argued that during the year there was no exempt income and therefore, disallowance u/s.14A of the Income Tax Act, 1961 (hereinafter referred to as the Act‟) is not warranted. Hence, it should be deleted. The Ld. AR of the assessee invited our attention to Schedule-11 which is part of Balance Sheet of the assessee‟s books of accounts placed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The Assessing Officer on this issue after considering the submissions of the assessee which are on record observed and held that there is no evidence as to the fact that the machinery purchased reached at the site of the assessee premises. Further, the Assessing Officer stated that since the assessee has come forward and surrendered the amount, hence, addition is made towards the income of the entire amount of ₹ 36 Lakhs and no penalty proceedings were initiated against the assessee. Further, since the above purchases is bogus and assessee has used borrowed money for the above purchase, therefore, interest over it calculated by the assessee at ₹ 80,787/- was also disallowed. 8. The Ld. CIT(Appeals) upheld the addition of bogus purchases as well as interest disallowed on the amount taken for such purchases for two reasons: (i) That the assessee had agreed for the said addition before the Assessing Officer and now the assessee cannot go back on it/ retract it. (ii) The assessee did not prove the genuineness of the said purchase of machinery before the Assessing Officer nor adduce any other evidence dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either proved the said purchases before the Assessing Officer nor adduced any further evidences during the Appellate proceedings in support of the purchases. The assessee also failed to bring any sort of evidence which proves beyond doubt that the assessee had purchased the said machinery. The Ld. DR vehemently argued that these facts demonstrates that sufficient opportunities were provided to the assessee to support his case on merits through furnishing documentary corroborative/supporting evidences of which the assessee did not avail of. The Ld. DR further submitted that the Revenue Authorities have given sufficient opportunities to the assessee but the assessee himself is not keen on using these opportunities for establishing its own case. Therefore, the contention of the assessee that sufficient opportunity was not given, should not be accepted and disallowances made on this ground should be sustained. 11. We have perused the case records and heard the rival contentions. We have also considered the judicial pronouncements placed before us on record. It is an undisputed fact that no evidence is there on record to demonstrate that the machinery r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer in his order analyzed the entire expenses regarding expansion plan and new machinery set up providing entire details as appearing in his order and held that since these expenses were in the nature of capital expenditure, therefore, added to the total income of the assessee. The Ld.CIT(Appeals) deleted this addition stating that it is a revenue expenditure. 16. We have perused records and analysed the facts and circumstances on this issue. We have also given considerable thought to the findings arrived at by the Assessing Officer as well as by the Ld. CIT(Appeals). We observe in the findings of the Assessing Officer on perusal of the detailed chart provided for installation of machinery, all expenses are in the nature of capital expenditure. Therefore, we reverse the findings of the Ld. CIT(Appeals) and uphold the order of the Assessing Officer. The additions made by the Assessing Officer are therefore sustained. Thus, ground No.1 of the Revenue s appeal is allowed. 17. Ground No.2 in Revenue‟s appeal is with regard to the deletion of addition made under Section 40A(3) of the Act. 18. The Ld. CIT(Appeals) on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a production of ₹ 5,32,85,323/-. 21. Both the parties agreed that the facts and circumstances and grounds are similar to that of the assessee‟s case in ITA No.556/PUN/2013 and ITA No.823/PUN/2013 for assessment year 2009-10. That regarding these issues in assessment year 2009-10, the Tribunal has accepted the findings of the Ld. CIT(Appeals) and deleted all the additions from the hands of the assessee. Since facts and issues are common for this year also, the decision rendered in ITA No.556/PUN/2013 and ITA No.823/PUN/2013 for assessment year 2009-10 shall apply mutatis-mutandis for this assessment year i.e. 2010-11 also in ITA No.1549/PUN/2014. Therefore, grounds No. 3 to 6 raised in appeal by Revenue are dismissed. 22. Grounds No. 7, 8 and 9 are general in nature and hence, requires no adjudication. 23. In the result, appeal of the Revenue in ITA No.1549/PUN/2014 is partly allowed. 24. In the combined result, appeal of the assessee in ITA No.1434/PUN/2014 and appeal of the Revenue in ITA No.1549/PUN/2014 are partly allowed. Order pronounced on 19th day of July, 2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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