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TMI Blog2017 (5) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer [AO] order dated 18/11/2013 wherein the total income of the assessee was determined at Rs. 10,09,83,380/- under normal provisions after addition of certain bogus purchases for Rs. 6,72,98,528/- as against income of Rs. 3,36,84,850/- determined in the original assessment u/s 143(3)(iii) dated 25/12/2011. The assessee had filed its return of income on 30/09/2009 declaring total income of Rs. 3,30,14,320/-. The assessee was engaged as civil and labour contractors during the impugned AY. The reassessment proceedings were initiated consequent to a survey action upon the assessee on 23/11/2012 where the assessee was found to have indulged in procuring certain bogus purchase bills without taking actual delivery of material. The assessee was found to have made purchases from following parties who were listed as hawala dealers as per information received from the Sales Tax Department:- No. Name of the Dealer TIN No. Amount (Rs.) 1. Centurian Sales Corporation 27530623900V 43,69,207/- 2. Atlas Enterprises 27710363744V 46,528/- 3. Cosmos Enterprises 27490290339V 56,871/- 4. U.V.Distributors Pvt. Ltd. 27450611043V 5,38,670/- 5. Om Corporation 27310540795 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for government projects where the work of the assessee was scrutinized at various levels and further such a huge magnitude of work could not have been accomplished by the assessee without consumption of raw material. The assessee purchased mainly steel from the alleged bogus suppliers, which was a key raw material to undertake such projects. Moreover, the assessee was in possession of all purchase invoices etc. and the payments to alleged bogus suppliers were through banking channels and hence, the purchases could not be doubted. Per contra, the Ld. DR contended that adequate relief has already been provided by Ld. CIT(A) to the assessee and therefore, no further relief could be granted to the assessee on the facts of the case. The assessee produced additional evidences before Ld. CIT(A) which were never subjected to AO's scrutiny. Further, the onus to substantiate the purchase squarely lied on the assessee and the assessee has failed to discharge the primary onus of proving the purchases conclusively as no evidences could be provided by him to substantiate actual delivery of goods despite making voluminous purchases from the bogus suppliers. 5. We have heard the rival contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Ld. CIT(A). 8. As we have already decided the issue in AY 2009-10 and partly allowed the appeal of the assessee by restricting the addition to 12.5%, there being no major change in facts or circumstances except for figures etc., taking the same stand, we restrict the impugned additions to 12.5% of Rs. 2,01,71,071/- which comes to Rs. 25,21,384/-. Hence, the revenue's appeal stands dismissed whereas Ground Nos. 1 to 4 of assessee's appeal stands partly allowed. 9. The assessee, in ground No. 5 to 6 has further contested another addition on account of Service Tax Liability u/s 43B for Rs. 51,74,066/-. Facts qua this addition are that during assessment proceedings, it was noted that the assessee reflected outstanding Service Tax Liability aggregating to Rs. 51,74,066/- in his Balance Sheet under the head liabilities but since the same remained unpaid by the assessee, the same attracted disallowance u/s 43B. The assessee contended that since the amount was not collected from the customers, the liability to pay the same did not arise in terms of Rule 6 of the Service Tax Rules. Further, the assesse never debited /routed the same though Profit & Loss account and therefore never c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 145A to contend that the receipts of assessee were to include the service tax portion and the deduction thereof could be provided only in terms of Section 43B upon actual payment of the same. Our attention was further drawn to explanation-2 to Section 43B to contend that as per this explanation, any sum payable means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law. Therefore, the assessee incurred the liability during impugned AY which, in fact, may not be payable under the relevant service tax rules and therefore, Section 43B was rightly invoked. Reliance was placed on the judgment of Apex court in Chowringhee Sales Bureau P. Ltd. [1977 110 ITR 385] 12. We have heard the rival contentions and perused the relevant material on record. First of all, we find that Section 145A has no application to the issue under dispute as this section deals only with valuation of purchase and sale of goods and no application in service contracts. It is also not in dispute that the assessee followed exclusive method of accounting and credited the Profit & Loss account only with net amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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