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TMI Blog2018 (1) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : S/Shri Nikhil Pathak and N.T. Jadhav ORDER PER SUSHMA CHOWLA, JM: Out of this bunch of six appeals filed by the Revenue, four appeals are against consolidated order of CIT(A), Pune-11, dated 18.11.2015 relating to assessment years 2007-08 to 2010-11 against respective orders passed under section 143(3) r.w.s. 147 of the Income Tax Act 1961 (in short the Act ). The other two appeals filed by the Revenue are against separate orders of CIT(A), Pune-11 CIT(A)-I, Kolhapur, dated 18.11.2015 20.11.2015 relating to assessment years 2011-12 2012-13 against respective orders passed under section 143(3) of the Act. 2. This bunch of appeals filed by the Revenue relating to same assessee on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience. The facts and issues in all the appeals are similar. However, in order to adjudicate the issues, we are taking up the appeal in ITA No.142/PUN/2016, relating to assessment year 2007-08. The issue raised in the present appeal is against claim of deduction under section 80IA(4) of the Act on additional income offered on account of purchases of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had declared different amounts against said parties names in different financial years, which were not supported by adequate documentary evidence. In the absence of any documentary evidence i.e. purchase order, delivery challans, goods received, the Director was asked during the course of Survey action how the said purchases could be proved to be genuine. The assessee after going through the said list of parties and amount mentioned, admitted that supporting bills were not there nor any supporting evidence of purchase of goods were available. However, since the old records were kept at different sites, he should be given time to collect the evidence. It was also mentioned by him that search action under section 132 of the Act was conducted in 2009 by the Income Tax Department, Kolhapur and both the above companies have disclosed sum of ₹ 24.71 crores and ₹ 6.29 crores, respectively in the block period on account of inflation of expenses. He asked for set off of said disclosure while estimating the amount of non-genuine purchases. The Assessing Officer noted that the assessee had booked bogus expenses amounting to ₹ 89,79,588/- under the head Purchase of sti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the purchases were not supported by delivery challans, inspection reports, etc. Further, he asked time to produce evidence and eventually, he stated that he was not able to substantiate all the purchases and in that case, credit may be allowed to him for the disclosure of additional income made during the course of search. The CIT(A) thereafter, referred to letter dated 08.01.2013, which was partly reproduced in the assessment order. The CIT(A) has reproduced complete letter at pages 8 and 9 of the appellate order and has pointed out that the list of purchases offered as additional income does not include purchases from M/s. Manvir Metal Pvt. Ltd. Thus, there was nothing either in the statement or in the letter to show that assessee had admitted that the purchases from M/s. Manvir Metal Pvt. Ltd. were not genuine and in the letter, the assessee had categorically claimed that the purchases from M/s. Manvir Metal Pvt. Ltd. were absolutely genuine and had been verified and so accepted by the Department during the course of search action. The CIT(A) thus, held that disallowance made by the Assessing Officer relying on statement of Shri Shinde was totally unjustified. He also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of Survey, retains the nature of business income and since it pertains to the same business, against which the assessee was claiming deduction under section 80IA(4) of the Act, hence the assessee is entitled to claim of deduction under section 80IA(4) of the Act. The CIT(A) also placed reliance on different decisions of various Benches of Tribunal in this regard, including the case of assessee. 9. The Revenue is in appeal against the order of CIT(A) and the issue which has been raised is only against the order of CIT(A) in allowing deduction under section 80IA(4) of the Act on additional income offered on account of purchases of ₹ 35,98,460/-. The Revenue vide grounds of appeal No.2 and 3 has raised the issue against deduction allowable under section 80IA(4) of the Act, simplicitor which was allowed to the assessee. 10. The learned Departmental Representative for the Revenue relying on the order of Assessing Officer pointed out that the assessee was not eligible to claim deduction under section 80IA(4) of the Act on additional income. He further pointed out that the issue raised in grounds of appeal No.2 and 3 was against the deduction allowable to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income which was added consequent to the Survey proceedings and 147 assessment proceedings. He further pointed out that two additions were made by the Assessing Officer on account of bogus purchases i.e. ₹ 48,78,977/- being purchases made from M/s. Manvir Metal Pvt. Ltd., which has been held by the CIT(A) not bogus purchases and the Revenue is not in appeal; hence the claim of deduction under section 80IA(4) of the Act is restricted to additional income of ₹ 35,98,460/- only, which merits to be allowed in the hands of assessee. In respect of grounds of appeal No.2 and 3 raised by the Revenue, the learned Authorized Representative for the assessee pointed out that the said issue stands decided by the Tribunal and hence, no merit in the grounds of appeal raised by the Revenue. 12. In respect of assessment years 2011-12 and 2012-13, assessments were made under section 143(3) of the Act, wherein the grounds of appeal No.1 to 3 are raised against basic claim of deduction under section 80IA(4) of the Act. He pointed out that where the facts herein remain same, then the said deduction merits to be allowed to the assessee. In respect of ground of appeal No.4, he pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee fulfils the conditions of executing infra project and hence, was entitled to claim deduction under section 80IA(4) of the Act. 14. After search proceedings, survey action under section 133A of the Act was conducted on the business premises of assessee, during the course of which, purchases made by the assessee from financial year 2005-06 onwards were verified. The assessee was unable to produce the documents in support of said purchases i.e. purchase orders, delivery challans, goods received, etc. and consequently, the Director of assessee company offered the said purchases as assessee s additional income. However, with a rider that during the course of search in the year 2009 the assessee had already declared certain additional income and hence, while estimating the amount of non-genuine purchases, the set off of disclosure already made should be given. In respect of certain purchases, the assessee furnished complete information but in respect of certain purchases, information could not be furnished. The Assessing Officer in such circumstances took up the case for reopening by recording reasons for reopening under section 147 of the Act and issuing notice under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) r.w.s. 153A(b) of the Act. Hence, we find no merit in the grounds of appeal No.2 and 3 raised by the Revenue. 16. Now, coming to the first issue raised by the Revenue i.e. against the order of CIT(A) in allowing deduction under section 80IA(4) of the Act on additional income offered by the assessee. It may be pointed out herein itself that during the course of search also, certain additional income was offered by the assessee, on which it claimed the aforesaid deduction under section 80IA(4) of the Act. The Tribunal vide paras 132 to 136 at pages 80 to 85 had considered the second issue of allowability of deduction under section 80IA(4) of the Act on the additional income declared during the course of search. The said additional income was offered on account of certain non-genuine expenditure being debited in the books of account. The Tribunal in turn, relied on the ratio laid down by the Hon ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. 333 ITR 175 (Bom) and in the case of CIT Vs. Sheth Developers (P) Ltd. in ITA No.3724/2010, vide order dated 27.07.2012 and also other decisions of Pune Bench of Tribunal. The Tribunal held the assessee to be eligible to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. 2. Whether on the facts and in the circumstances of the case and in law, the learned CIT(Appeals) erred in holding that the ratio laid down by the Hon ble Mumbai High Court in the case of CIT Vs. ABG Heavy Industries Ltd. (2010) (322 ITR 323) (Bom) is applicable to the facts and circumstances of assessee s case? 3. Whether on the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the enterprise carrying on the business [of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining] be read cumulative though it was not the issue prevailing in the case of the assessee. 4. Whether on the facts and in the circumstances of the case and in law, the CIT(A) erred in allowing deduction u/s 80IA(4) of the Act of ₹ 9,25,18,881/- on the additional income offered on account of purchases. 21. The grounds of appeal No.1 to 3 are against the claim of deduction under section 80IA(4) of the Act against the business profits of undertaking. The factual aspects of the case in the year under appeal are identical to the factual aspects in earlier years and the Revenue has failed to point out any differe ..... 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