9911796707
TMI Blog2016 (1) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant craves leave, add, alter, modify, delete, above ground of appeal before or at the time of hearing, in the interest of natural justice. 3. The issue raised in the present appeal is against the addition made on account of bogus purchases to the tune of Rs. 1,45,50,189/-. 4. Briefly, in the facts of the present case, the assessee, a partnership firm was carrying on the business of electrical works contract and re-seller of electrical items. For the year under consideration, the assessee had furnished return of income declaring total income of Rs. 22,49,250/-. The assessee for the year under consideration had carried out sub-contract on behalf of M/s. S.T. Electricals Pvt. Ltd. for Maharashtra State Electricity Distribution Company Ltd. to the extent of Rs. 2,09,20,344/-. For carrying out the said sub-contract, certain purchases of various materials were made by the assessee including purchases from S.G. Enterprises and M/s. Steel Craft. The assessee had made purchases of Rs. 91,90,787/- from S.G. Enterprises and Rs. 53,59,402/- from M/s. Steel Craft, totaling Rs. 1,45,50189/-. The Assessing Officer noted that both these parties were shown as creditors by the assessee for go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 25.11.2011 , the Assessing Officer intimated the assessee that the notices under section 133(6) of the Act and the Summons under section 131 of the Act were returned undelivered in respect of M/s. S.G. Enterprises and in respect of M/s. Steel Craft, no response was received. Further, in order to verify the genuineness of the two suppliers field visit was made by the Assessing Officer and in respect of M/s. S.G. Enterprises, Hadapsar, Pune, the Assessing Officer noted that the location was far from the city limits and was a newly established region with very few commercial establishments. On marking enquiries from various Departments, the whereabouts of M/s. S.G. Enterprises could not be traced. The Survey No.37 i.e. the place where M/s. S.G. Enterprises has shown its address was upcoming area where many construction activities mainly of residential were going on. Further, the telephone numbers mentioned on the bills of M/s. S.G. Enterprises submitted by the assessee had no connectivity. In respect of the other concern M/s. Steel Craft at 640, Dattawadi, Pune, the location was a shanty / slum place with few commercial establishments. On marking enquiries by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he information available on public domain. The CIT(A) in this regard observed that in view of the fact that once the Assessing Officer had made his findings known to the assessee, it was incumbent upon the assessee to discharge his onus, which had not been done in the case. In any case, having TAN, PAN or having filed return of income electronically, does not ipso facto prove the genuineness of the transactions made, especially when the parties were not available at the given addresses and their phone numbers were not working and there was no reply to the notices issued under section 133(6) of the Act as well as Summons under section 131 of the Act. In view thereof, the CIT(A) held that there was no merit in the submissions of the assessee in this regard. The CIT(A) further distinguished the reliance placed upon by the learned Authorized Representative for the assessee and various decisions and pointed out that in the present case, where the parties itself were found to be non-existing on verification made by the Assessing Officer, for which, the assessee has no reply and even at this stage, where the assessee is not in a position to produce parties, as it claims that it has no con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors, but none were found at the respective addresses nor their whereabouts were known. In respect of reliance placed on the ratio laid down by the Hon'ble Bombay High Court in CIT Vs. Nikunj Eximp Enterprises (P.) Ltd. (supra), the learned Departmental Representative for the Revenue pointed out that the facts of the case were distinct, wherein before the Hon'ble High Court, all the details were filed, but there was no appearance by the concerned party and in such circumstances, the Hon'ble Bombay High Court held that the said purchases were genuine. In respect of reliance placed upon by the learned Authorized Representative for the assessee in CIT Vs. M.K. Brothers (supra) i.e. the ratio laid down by the Hon'ble Gujarat High Court, the learned Departmental Representative for the Revenue pointed out that the facts of the case were also at variance. 10. We have heard the rival contentions and perused the record. During the year under consideration, the assessee had undertaken sub-contract from M/s. S.T. Electricals Pvt. Ltd. (main contractor), which was received by it from Maharashtra State Electricity Distribution Company Ltd., a government of Maharashtra enterprise. The said cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid parties and also to furnish complete evidence in this regard. The assessee had produced the bills in respect of the said parties. However, the Assessing Officer noted that font size of the bills issued by both the concerns were identical and could not be relied upon. The main objection of the Assessing Officer in this regard was that the assessee had not paid the said parties for the purchases made from the said concerns up to year 2010. The case of the assessee in this regard was that since it was laying cables as per the subcontract and there were some disputes for measuring of the cables and consequently, payments from the said contractors were delayed. As soon as the payments were received from M/s. S.T. Electricals Pvt. Ltd. in March, 2010, immediately, cheques were issued on 31.03.2010. All the payments to the said parties were paid by cheque and it is not the case of the Revenue that the money has travelled back to the assessee. Our attention was drawn to the copies of bills along with delivery challans issued by M/s. S.G. Enterprises and M/s. Steel Craft, which are placed at pages 11 to 35 of the Paper Book. The perusal of the said bills reflect the complete details in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in respect of the said sub-contract and hence, the delay in making the payments to the said concerns. However, the said payments were made before date of assessment order, which was passed on 16.12.2011. Further, the assessee during the course of hearing has tried to reconcile the details of works contract supplied party-wise vis-à-vis consumption of various items. The assessee has furnished sample details in this regard and has also pointed out that VAT details clearly reflect the purchases made from the said concerns. Further, the assessee has placed on record the copy of bank statement for the relevant period, under which the payments to the said parties have been released in the month of April, 2010, against cheques issued at the close of March, 2010. The assessee has made purchases from the said parties, which are entered in its books of account, which were not rejected by the Assessing Officer and book results have been accepted. Further, the said purchases were of cables, which in turn have been supplied to State undertaking as part of sub-contract undertaken. 11. The Hon'ble Bombay High Court in CIT Vs. Nikunj Eximp Enterprises (P.) Ltd. (supra) had laid down the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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