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TMI Blog2016 (2) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... JM And Shri Rajesh Kumar, AM For the Appellant : Shri J. Saravanan For the Respondent: Shri Bhupendra Shah ORDER Per Rajesh Kumar, A. M This appeal by the assessee is directed against the order dated 21.05.2013 of Commissioner of Income Tax (Appeals)-35, Mumbai (hereinafter called as the CIT(A) ) for assessment year 2010-11. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the ld.CIT(A)erred in deleting the addition of ₹ 87,24,259 which was made by invoking the provisions section 69C of the I.T. Act by treating the purchase are genuine. 2. On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in deleting the addition of ₹ 14,36,653 which was made by invoking the provisions of section 69C of the I.T. Act by treating the purchase are genuine without appreciating the fact that the notices u/s 133(6) issued to the parties were returned unnerved as addressee was not available at the given address. 3. On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in giving relief on ₹ 74,08,737/- in case of volunt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s 132 of the Act in the case of M/s. Neev Infrastructure (P) Ltd. on 22.09.2011, survey was conducted on Shri Mafatlal V. Shah wherein he stated that he was providing accommodation bills to various parties. During post search verification it was found that the assessee had also received accommodation entries from Shri Mafatlal V. Shah and consequently a statement on oath u/s 131 of the Act of the assessee, he offered additional income of ₹ 1,93,71,170/- by furnishing the details of bogus bills followed by the revised return of income by the assessee at ₹ 7,42,78,888/- on 29.02.2012 offering the amount surrendered above. 3. The first ground relates to deletion of addition of ₹ 87,24,259/- made by the AO u/s 69 C on account of unexplained expenditure. The brief facts of the case are that the AO during the course of scrutiny proceeding noticed from the list of parties from whom the purchases were made by the assessee that there were some suspicious dealers who were indulging in issuing bogus bills without any delivery of the materials on a commission basis as per official website of the Sales Tax Department of Govt. of Maharashtra. The AO issued notices to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following decisions of the Co-ordinate Benches in which identical issues were decided in favour of the assessee:- ITA No.6727/Mum/2012 (AY-2009-10) Dated 20.08.2014. ITA No. 2826/Mum/2013 (AY-2009-10) Dated 05.11.2014. ITA No. 2959/Mum/2014 (AY-2010-11) Dated 28.11.2014. ITA No. 5920/Mum/2013 (AY: 2010-11) Dated 27.03.2015. ITA No. 5246/Mum/2013 (AY: 2010-11) Dated 05.03.2015. ITA No. 5706/Mum/2013 (AY: 2010-11)) Dated 13.05.2015. Ultimately, the ld. Counsel submitted before us that since the issues involved in the appeal of the revenue were fully covered in favour of the assessee by the foregoing decisions of the Tribunal, Mumbai benches and therefore, the CIT(A) order did not require any interference and be confirmed. Per contra the ld. DR relied on the order of the AO and prayed for setting aside the order of the CIT(A) and restore that of the AO. 5. We have considered the rival submissions and perused the materials on record. We find from the records and orders of the authorities below that there three additions made by the AO of ₹ 87,24,259/- , ₹ 14,36,653/- and ₹ 20 lakhs u/s 69 C of the IT Act and in respect of 4th ,the AO did not al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o find out as whether there was any immediate cash withdrawal from their account. We find that no such exercise was done. Transportation of good to the site is one of the deciding factor to be considered for resolving the issue. The FAA has given a finding of fact that part of the goods received by the assessee was forming part of closing stock. As far as the case of Western Extrusion Industries. (supra) is concerned, we find that in that matter cash was immediately withdrawn by the supplier and there was no evidence of movement of goods. But, in the case before us, there is nothing, in the order of the AO, about the cash traial. Secondly, proof of movement of goods is not in doubt. Thererfore, considering the peculiar facts and circumstances of the case under appeal, we are of the opinion that the order of the FAA does not suffer from any legal infirmity and there are not sufficient evidence on file to endorse the view taken by the AO. So, confirming the order of the FAA, we decide ground no.1 against the AO. In the case of ITA No. 2826/Mum/2013 (AY-2009-10) dated 05.11.2014, similar addition to the tune of ₹ 1,74,01,436/- was deleted by the Tribunal. The relevant para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther investigation but the AO did not make any further investigation and merely completed the assessment on suspicion. Once the assessee has brought on record the details of payments by account payee cheque, it was incumbent on the AO to have verified the payment details from the bank of the assessee and also from the bank of the suppliers to verify whether there was any immediate cash withdrawal from their account. No such exercise has been done. The Ld. CIT(A) has also confirmed the addition made by the AO by going on the suspicion and the belief that the suppliers of the assessee are Hawala traders. We also find that no effort has been made to verify the work done by the assessee from the Municipal Corporation of Greater Mumbai. We agree with the submissions of the Ld. Counsel that if there were no purchases, the assessee would not have been in a position to complete the civil work. 8.1. On civil contract receipts of ₹ 32.05 crores, the assessee has shown gross profit at 14.2% and net profit at 9.72%. 8.2. Even if for the sake of argument, the books of accounts are rejected, the profit has to be computed on the sales made by the assessee U/s. 44AD of the Act, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely on the basis of observations made by the Sales tax dept and has not conducted any independent enquiries for making the addition especially in a case where the assessee has discharged its primary onus of ITA. No.5920/Mum/2013 and 6203/Mum/2013 7 showing books of account, payment by way of account payee cheque and producing vouchers for sale of goods, such an addition could not be sustained. The Ld CIT(A) has also appreciated the contentions of the assessee that he was not provided with an opportunity to cross examine the sellers, which is required to be given as per the decision of Hon ble Kerala High Court in the case of Ponkunnam Traders (83 ITR 508 102 ITR 366). Accordingly, the Ld CIT(A) has deleted the impugned addition. On a careful perusal of the decision rendered by Ld CIT(A) would show that the first appellate authority has analysed the issue in all angles and applied the ratio laid down by the High Courts and Tribunals in deciding this issue. Hence, we do not find any reason to interfere with his order on this issue. In the case of ITA No. 5246/Mum/2013 (AY: 2010-11) dated 05.03.2015, the Tribunal confirmed the order of the CIT(A) deleting the addition of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see was forming part of closing stock. As far as the case of Western Extrusion Industries. (supra)is concerned, we find that in that matter cash was immediately withdrawn by the supplier and there was no evidence of movement of goods. But, in the case before us, there is nothing, in the order of the AO, about the cash traial. Secondly, proof of movement of goods is not in doubt. Therefore, considering the peculiar facts and circumstances of the case under appeal, we are of the opinion that the order of the FAA does not suffer from any legal infirmity and there are not sufficient evidence on file to endorse the view taken by the AO. So, confirming the order of the FAA, we decide ground no.1 against the AO. 6. We are of the view that the facts of case of the assessee are same as in the foregoing decisions and thus the case of the assessee is squarely covered by these decisions of the tribunal. We, therefore, find no reason to interfere in the order of the CIT(A) and uphold the same by dismissing the appeal of the revenue. The AO is directed accordingly. 7. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 02nd February, 2016. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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