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TMI Blog2017 (11) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... eate the provision for a sum of ₹ 51 lakhs, could not secure the primary evidence even in respect of the expenditure that was booked, and unable to explain why the balance provision for ₹ 30,50,900/- had to be created. All these things show that at the end of the relevant financial year the assessee did not have even the faintest idea as to the probable expenditure that may have to be paid for which the provision has to be created. We, therefore, find that the plea taken by the assessee does not seem to be believable ex facie, as such. With this view of the things, we do not propose to interfere with the findings of the Ld. CIT (A) while dismissing the appeal. We, therefore, find the appeal devoid of merits and accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 declaring a total loss of ₹ 2,11,32,933/-. During the scrutiny AO found that as compared to the earlier assessment order there was a huge increase in the proportionate cost of project material. He called upon the assessee to explain why there is huge difference in the cost of material at 40.64% in the earlier, whereas it happens to be at 49.73% for the current year. Not being satisfied with the explanation of the assessee that it is not an abnormal thing in Hi-tech business, AO verified the details of cost of material and found that the assessee had debited a sum of ₹ 51,00,000/- in its projects-import ledger account. AO recorded a finding that the assessee did not respond to the clarification sought by way of order sheet e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT (A) upheld the disallowance to the tune of ₹ 51 lakhs and dismissed the appeal. Hence, the assessee is before us in this appeal. 4. It is the submission of the Ld. AR that the project under the name and style M/s Saudi International Petrochemical Company (SIPCHEM) was started in the AY 2008-09 and was completed in the AY 2010-11. The assessee recognized an income of ₹ 3,00,61,376/- for the year ending with 31.03.2010 and all the expenses incurred against the said project were also booked in the same year. In that process an expenditure of ₹ 1,64,30,323/- under the head Cost of material , including an amount of ₹ 51 lakhs relevant for this appeal and such, ₹ 51 lakhs was provided as expenditure bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in disallowing the expenses for want of proof. Further according to the Ld. DR when the assessee received goods long prior to the end of the relevant assessment year, there was no reason as to why there is a provision for ₹ 51 lakhs, where the goods were received in respect of only ₹ 20,49,100/-. According to the Ld. DR the profit is shifted unduly from the AY 2010-11 to the subsequent year by dubious methods. He further submits that when the Ld. AR submits that in this digital age the transactions are done in e-form, as such, bills etc. need not be looked into, there is no reason for the delay in the assessee securing the invoices. When the goods were received in the earlier financial years the assessee should have made th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us the assessee did not produce any material to co-relate the commercial invoice no. 92335948 dated 16.03.2010 with the assessee, except the payment schedule. So also in respect of the other two invoices, the suspicion entertained by the Ld. CIT (A) does not seem to be baseless. When the assessee is taking shelter of the digital age for not producing the invoices in original, delivery notes, project order, shipment note, delivery note or any other correspondence evidencing the placing of order and receiving the same in the year under consideration, we are of the opinion that for the same reason the assessee should not have pleaded any delay in receiving the invoices. When the goods were delivered even according to the assessee more than a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions. All these facts put together, do not inspire any confidence in our mind to believe that when the goods were delivered for a sum of ₹ 20,49,100/-, the assessee does not know the probable value thereof and went on to create the provision for a sum of ₹ 51 lakhs, could not secure the primary evidence even in respect of the expenditure that was booked, and unable to explain why the balance provision for ₹ 30,50,900/- had to be created. All these things show that at the end of the relevant financial year the assessee did not have even the faintest idea as to the probable expenditure that may have to be paid for which the provision has to be created. We, therefore, find that the plea taken by the assessee does not seem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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