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TMI Blog2016 (10) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... t thereof and in our view prima facie it appears that this payment of ₹ 25,00,000/- is connected with the purchase of the crane but the assessee is not coming out with the true and correct facts - matter remanded back for re-determination of the issue on merits - Decided partly in favor of assessee. - I .T.A. No.5673/Mum/2014 - - - Dated:- 14-9-2016 - SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri Devendra Jain For The Revenue : Shri Naveen Gupta ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee company, being ITA No. 5673/Mum/2014, is directed against the appellate order dated 26th June, 2014 passed by learned Commissioner of Income Tax (Appeals)- 22, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2010-11, the appellate proceedings before the learned CIT(A) arising from the assessment order dated 18th December, 2012 passed by the learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income Tax Act,1961 (Hereinafter called the Act ). 2. The grounds of appeal raised by the assessee company in the memo of appeal filed with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .g., an increase in capacity. It was submitted that the crane was purchased in total working and running condition from the party and had been directly dispatched to the site for work, the question of considering the expense for dismantling, loading, and unloading and assembling as capital expenditure does not arise and it was rightfully considered as revenue expenditure. The crane has started working from 8th February, 2010 onwards for which the work order for the crane was in the name of Janak Cranes and has been changed in assessee company's name from April, 2010 onwards and hence the hiring bill for the month of Feb March 2010 were raised on Janak Cranes itself. The assessee company was asked by the AO to justify the genuineness of the above expense. No details were provided by the assessee company. The assessee submitted that the crane was purchased by the assessee in working condition along with running work order with all its accessories from Janak Cranes at Maithan Power Project site, Jharkhond, only. The said crane was moved to another location of the same site at Maithan Power project site, Jharkhand for hiring purpose directly from the place at which it was purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has raised invoice on Janak Cranes and were able to get it changed in their name from April, 2010 onwards is proving clearly that assessee had continued operating the said crane at the same site at Maithan Power Project, Jharkhand only without indulging into a mobilization of crane from one site to another site/location for which the assessee has not furnished any supporting document to prove that the crane was in fact mobilized from one location to another location within Maithan Power project site. The A.O. also referred to the contents of the agreement with the Janak Cranes and M/s Simplex Infrastructures Limited. It was also observed that on 22nd February, 2010 Janak Cranes requested for change of work order to M/s Simplex infrastructures Limited to be replaced in favour of the assessee company. Similarly on 22nd February, 2010 the assessee also wrote to M/s Simplex Infrastructures Ltd. for the issuance of work order in their name. The A.O. accordingly came to the conclusion that the expenditure claimed by the assessee on account of loading and unloading charges is non-genuine which is evident from the work order and an amount of ₹ 25 lacs was disallowed as busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded to assessee for the month of February and March 2010 was furnished before the ld. CIT(A) which shows that the cranes might not have been put into use in the month of February and March 2010 by the assessee. With respect to the expenditure related to transportation, dismantling etc. was paid to M/s. Janak Cranes, the assessee was directed to file the copy of the invoice raised in support of the contention that the payment towards the dismantling, transportation etc. was genuine. The ld. CIT(A) held that the date of sale vis-a-vis the date of invoice raised in respect of dismantling, transportation etc. compared to the claim of use of crane from 5.02.2010 and non mention of transportation in the invoice and non existence of contract between the assessee and the Simplex Infrastructures during this financial year, the supplier of the crane had only issued accommodation bill for the month of February March, 2010 towards crane hiring. Similarly, the alleged dismantling, loading, unloading, assembling and transportation of crane was also an accommodation entry given by the supplier. The work site being in the mines dismantling, transportation by hiring the trailers and reassembling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the interim period from 08-02-2010 to 31-03-2010 , the invoicing for hiring of crane was done by the assessee on Janak Cranes(page 9-10/pb) as the work order was in favour of Janak Cranes , and from April 2010 the invoicing was done directly in favour of Simplex Infrastructure Limited (pb/page 19-20) as the LOI dated 26-03-2010 was issued by Simplex Infrastructure Limited in favour of the assessee. It was submitted that the authorities below erred in treating the said expenses of ₹ 25,00,000/- for demobilization and mobilization of cranes by de-assembling, transportation and assembling at another location with in the same site of Maithan Power Project at Jharkhand as not genuine and treating the same transaction as sham and colorable device. Thus, it was submitted in nut-shell that the said expenses of ₹ 25,00,000/- ( exclusive of service tax amount which is claimed as cenvat credit by the assessee ) for dismantling , transportation and re-assembling of the crane at a different location within site of Maithan Project, Jharkhand be allowed as normal business expenditure .The assessee relied upon the decision of Hon ble Bombay High Court in the case of CIT v. Nikunj E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embly of the said crane i.e for demobilization and mobilization of the said crane at new location at the same site for which no evidence whatsoever is available on record and this contention of the assessee cannot be accepted and is hereby rejected. However, if we consider the entire sequence of event in totality , it prima facie emerges that the assessee initially paid ₹ 25,00,000/- to Janak Cranes on 19-01-2010 which appears prima facie to be advance for booking /confirming the purchase of crane and thereafter invoice of ₹ 7.20 crore was received on 05-02-2010 being invoice no76 issued by Janak Cranes as per ledger account enclosed in paper book/page 1 . Thereafter , HDFC bank loan of ₹ 7.20 crores is reflected for making payment for purchase of the crane on 02-03- 2010 . The invoice dated 20-02-2010 bearing no 169 for service charges was received which prima facie appears to be for the purposes to square off the balance of advance outstanding in the shape of dismantling, loading, unloading and assembling of cranes against which no evidence for the actual execution of the stated job in the invoice is on record. In our considered view, the assessee is not coming ..... X X X X Extracts X X X X X X X X Extracts X X X X
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