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TMI Blog2016 (6) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the shareholders. Disallowance of purchases - Held that:- No merit for disallowance of entire amount of purchases. Keeping in view the totality of facts and circumstances of the case vis-a-vis rate of net profit shown by the assessee, to cover up leakage of revenue, if any, we restrict the disallowance of purchases to the extent of 2% of the purchases. Claim of depreciation on wind mill - Held that:- The assessee has duly filed certificate from Superintendent of Engineer Jodhpur certifying the date of commencing the wind mill on 30-9-2009. Certificate from Suzlon Engineering being supplier of the plant was also filed for meter reading of September, 2009. As per these certificates wind mill has worked for more than 180 days. Accordingly, there is no justification for allowing claim of depreciation at 40% applicable for half year. In view of the documentary evidence placed on record, we direct the AO to allow depreciation for the full year on wind mill so installed by the assessee. We direct accordingly. - ITA No. 2269/Mum/2015 - - - Dated:- 22-6-2016 - Shri R. C. Sharma, AM And Shri Pawan Singh, JM Assessee by : Shri N.R.Agrawal Pavan Ved Revenue by : Ms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed at pages 371 to 397 of Paper Book. It was further submitted that summons were served to three shareholders. Summons could not be served to M/s Nakshtra Business (P) Ltd. and Kush Hindustan, both of which were assessee in the same Ward-8(2). It was further submitted that all the shareholders had replied to the AO as per the documents placed and narrated by the AO at page 16 of the assessment order. Our attention was invited to the documents placed at page 150 of the paper book in support of the contention that two shareholders are listed companies in Bombay Stock Exchange. As per ld. AR merely because shareholders were not produced or attended before the AO in response to summons u/s.131, no addition can be made in view of the decision of Hon ble Delhi High Court in the case of Orbital Communications Pvt. Ltd., 327 ITR 560 and decision of Hon ble Supreme Court in the case of Anis Ahmad Sons, 297 ITR 441. Our attention was also invited to the details of shareholders filed before the AO like confirmation, board resolution, audited accounts, bank statements, share certificate copies. In view of the decision of Hon ble Bombay High Court in the case of Creative World Tel, 333 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 727/M/2012(Mum); (iii) ITO vs. D.N. Shah Co. [2 TTJ 1217 (Ahd)]; (iv) CIT vs. M.K. Brothers [(1987) 163 ITR 249 (Guj)] (v) M/s Imperial imp exp vs ITO(ITA 5427/Mum/2015) (vi) Deepak Popat Lal Ghada vs. ITO(ITA 6203/Mum/2013) (vii) DCIT vs. Shri Jitendra S. Motani [ITA 6178/M/2007 (Mum)] (viii) CIT vs. Sanjay Oil Cake Industries v. CIT [316 ITR 274 (Guj)] 7. With regard to share capital, it was contended by ld. AR that the assessee had already filed with the A.O a letter dated 05/02/2013 again on 26/312013 inclusive of following papers :- 1) Confirmations along with the PAN, . 2) Acknowledgement of ITRs filed, . 3) Bank statements of share holders Sources from where share application is paid. 4) Audited Final accounts of the share applicants. 5) All receipts are by account payee cheques. 6) Applicants are all Limited companies having high reserve surplus. 7) Out of Five share holder companies Two are listed in Mumbai Stock Exchange regularly traded. 8) All above facts proves that share holders are in existence all the transactions are genuine. 9) All the shareholders are still holding their investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantial investment in shares. 5) ln the investment schedule of the applicant companies name of the assessee is appearing. 6) All are regularly assessed to tax. 10. In support of contention that if assessee is unable to satisfy the AO as to the source from which depositor has derived the money which he has advanced to assessee, no addition can be made and for this purpose reliance was placed on the following decisions :- Daulatram Rawatmull v/s CIT 87 ITR 349 (S.C.) Sarogi Credit Corporation v/s CIT 103 ITR 344 (Pat) Tolaram Daga v/s CIT 59 ITR 632 (Assam) ITO v/s. Suresh Kalmadi ITA No.764 (Pune) 1985 - Page 955 BCA January 89 Held the assessee is under no obligation to show source of the source for loans. It is immaterial even if creditors have shown exact amount of received on the date of advancement of loan if after repayment exact cash is drawn. No other no addition can be done. CIT v/s Oasis Hospitalities Pvt. Ltd 333 ITR 119 (Del) Also creditworthiness of applicant not proved balance addition was confirmed based on the fact that some shareholder are agriculturists, Identity capacity not proved. In other cases addition delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial or evidence found in support of amount surrendered under these circumstances, addition is liable to be deleted. For this purpose reliance was placed on the following decisions :- Satish Builders v/s ACIT ITA no. 4095 12005 Bench 'C' dated 13/212009 (Del) reported in Tax review March 2009 page 65 23 DTR 171 (Del); DCIT v/s Premsons 'B' Bench Mumbai BCA April 2009 page 25 130 TTJ 159 (Mum) DCIT v/s Pahar Ganj Grih Nirman Sahakari Samiti Ltd. 99 TTJ 549 (Jaip) Ajit Chintaman Karve v/s ITO 311 ITR (AT) 66 (Pune) 12. On the other hand, ld. DR relied on the detailed finding recorded by the AO CIT(A) as well as judicial pronouncements referred by lower authorities in their respective orders. 13. We have considered rival contentions, carefully gone through the orders of authorities below and also deliberated on the judicial pronouncements referred by lower authorities in their respective orders as well as cited by ld. AR during the course of hearing before us in the context of factual matrix of the case. From the record we found that assessee is in the business of road construction for State Government, MMRD etc. This sector is highly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and was found to be bogus by the sales tax department. From the record we found that even though during survey assessee has given a statement on 7-6-2012 with regard to share capital and purchases, however, same were retracted on 27-12-2012. With respect to the shareholder the AO made an enquiry and issued them letters to appear in person. However, the shareholders did not personally appeared before the AO. The AO in his order observed that assessee company vide its order dated 26-3-2013 had furnished part details with respect to its shareholders, but none attended in response to summons u/s.131(1). The AO also observed that each shareholders company dispatched its reply in response to summons u/s.131(1), however, they did not bother to attend his office. From the record we found that even though assessee has filed the details asked by the AO in support of the share capital being subscribed by respective shareholders, however, they were not produced before the AO even after asking by the AO, in view of the documentary evidence placed on record and considering the fact that shareholders had not appeared before the AO, we restore the matter back to the file of AO for deciding afresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase so made cannot be disallowed, for this proposition reliance can be placed on the decision of Hon ble jurisdictional High Court in the case of Nikunj Exim (supra), Atma Prakash Bathra and also Delhi High Court in the case of Sunrise Tolling Pvt. Ltd. (supra). From the record we also found that the material so purchased for construction was as per the work contract and MMRDA and Consultant certificate was obtained for the utilisation of those materials. We had also compared the rates at which assessee has purchased the goods with the rates prescribed by the Thane District Schedule Rate as contained at page 73 to 126 of the paper book. We had also verified the certificate issued by Mumbai Metropolitan Region Development Authority with regard to awarding of contract work of widening and construction of eastern express highway to the assessee. The certificate so issued by the Mumbai Metropolitan Region Development Authority also certified that they have been supervising the work regularly and taking the samples of material and testing the same at Government and private laboratories as prescribed by MMRDA. The material so purchased and consumed was found to be correct as per the tend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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