TMI Blog2018 (2) TMI 1955X X X X Extracts X X X X X X X X Extracts X X X X ..... inception. Though the AO had adopted percentage completion ( method for A.Y. 2008-09 to AY 2011-12, the Id. CIT(A) had deleted the addition in this respect for A.Y. 2008-09 to A.Y. 2010-11. The revenue's appeal for A.Y. 2008-09 and A.Y. 2009-10 was dismissed being below the prescribed tax limit. The revenue is not in appeal against the said deletion for current A.Y. i.e. 2010-11. Thus, project completion method followed by the assessee has been accepted by the revenue. It was submitted by the assessee that since no expenditure/deduction was claimed by the assessee for the year under consideration, no disallowance should be made for the year under consideration based on the decision of the on ble Mumbai ITAT in the case of M/s. Marut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statement of certain persons without appreciating the defects pointed out therein and without affording the appellant any opportunity of cross-examination of these parties. 4. The appellant prays that - (a) WIP as shown in return of income be restored and disallowance of ₹ 52,02,6557- be deleted; (b) Any other relief, as may be deemed fit. 5. All the above grounds are independent and without prejudice to each other. 3. The grounds taken by Revenue are as under:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition of ₹ 5,72,36,016/- on account of bogus purchases to ₹ 52,02,655/-. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in not appreciating the fact that applicability of provisions of 40A(3) attracts 100% bogus purchases to be held as profit. 8. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 9. The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary . 4. Rival contentions have been heard and record perused. 5. Facts in brief are that assessee is engaged in the business of builder and developer. For such building project assessee was following Project completion method. During the course of scrutiny assessment, as per information from Sales Tax Department, the AO observed that asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITAT in the case of Simit P Sheth (supra) and approved by the Hon'ble Gujarat High Court. The said disallowance is worked out at ₹ 52,02,655/-. (Refer page 39 of CIT(A) order). 9. Since the assessee had not claimed any purchases as deduction for the year under consideration but accounted for in work in progress carried forward to subsequent years, the Id. CIT(A) reduced the work in progress by an amount of ₹ 52,02,655/-. Accordingly, the Id. CIT(A) has deleted the disallowance for the year under consideration and enhanced the income of the assessee for A.Y. 2012-13 to the tune of ₹ 52,02,655/- when the project was completed and the expenditure was claimed. 10. Against the above order of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party was a MVAT defaulter and accordingly to avoid the consequences of default may have given such a statement. Reliance in this regard is placed on the decision in the case of CIT v. M/s. Ashish International (ITA no. 4299 of 2009) (Bom.) and H.R. Mehta v. ACIT [2016] 387 ITR 561 (Bom.) 14. It was also argued by learned AR that Section 48(5) of MVAT Act shifts the burden of paying MVAT to the purchaser of goods on the seller giving such a deposition of issuing bogus bills. The AR accordingly submitted that the statement of VAT defaulters who are saving their skin and having vested interest cannot be relied upon. In respect of construction business it was argued that with regard to delivery of goods, the transport documents were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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