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TMI Blog2019 (12) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... he considered view, that the CIT(A) after duly appreciating the facts of the case had by way of a very well reasoned order vacated the addition - Decided in favour of assessee. Bogus purchases - disallowance @12.5% of the aggregate value of impugned purchases - HELD THAT:- Neither the assessee had been able to substantiate the genuineness of the purchase transactions on the basis of any irrefutable documentary evidence, nor the revenue has carried out the required extensive verifications for arriving at a fair conclusion as regards the genuineness of the purchase transactions. Accordingly, in all fairness, we set aside the order of the CIT(A) in context of the issue under consideration and restore the matter to the file of the A.O for carrying out necessary verifications. Needless to say, the A.O shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee, who shall remain at a liberty to substantiate the genuineness of the impugned purchase transactions on the basis of fresh documentary evidence. Decided in favour of assessee for statistical purposes. - ITA No. 1504/Mum/2017 And C.O. No. 255/Mum/2018 (Assessment Year: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act, 1961, (the 'Act ), as confirmed by Learned Commissioner of Income Tax (Appeals)-21 [CIT (A)]. prefers an appeal against the same on following grounds. Which it is prayed, may be considered without prejudice to one another: On the facts and circumstances of the case and in law, the learned CIT (A) erred in confirming the addition 12.5% made by the learned AO of ₹ 1,11,84,319 on alleged unsubstantiated purchases disregarding the fact that summons under section 133(6)/131 of the Income Tax Act, 1961 were duly served on the alleged bogus parties. The appellant craves leave to add, alter, amend, delete or modify any of the above-referred grounds of appeal. 2. Briefly stated, the assessee company which is engaged in the business of real estate development leasing of properties had e-filed its return of income for A.Y. 2013-14 on 30.09.2014, declaring its total income at ₹ 74,69,54,160/-. Return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act. 3. During the course of the assessment proceedings, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their respective statements recorded under Sec. 131 of the Act, both in the course of the survey proceedings and also the post-survey proceedings, on being confronted with the aforesaid 02 entries aggregating to ₹ 9,50,00,000/- viz. (i). ₹ 7,50,00,000/- dated 25.06.2012; and (ii). ₹ 2,00,00,000/- dated 28.02.2013, appearing in Annexure A-2 and Page 27, had stated, that the same were the amounts which were to be paid to S/shri Avinash Bhosale Amit Bhosale, as advance for purchase of land by the assessee company at Village: Mundwa, Pune, which it proposed to acquire for setting up a residentialcum-commercial project, but, the said payments had not been made till date. However, the A.O held a conviction, that in the absence of any explanation or justification by the assessee, it was to be inferred that the aforesaid amounts mentioned against the 02 entries in Annexure A-2 Page 27 were the unexplained investments made by the assessee. Accordingly, on the basis of his aforesaid conviction the A.O made an addition ₹ 9,50,00,000/- under Sec.69 of the Act. 5. Also, in the course of the assessment proceedings, it was observed by the A.O that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the view that the assessee had actually purchased the aforesaid goods which were put to use in its sample flats. However, the A.O held a conviction that the assessee would have procured the aforesaid items not from the abovementioned dealers but from the open/grey market. Accordingly, the A.O backed by his aforesaid conviction disallowed 12.5% of the aggregate value of the purchases which were claimed by the assessee to have been made from the aforementioned parties and carried out a disallowance of ₹ 1,11,84,319/- (i.e. 12.5% of the impugned purchases of ₹ 8,94,74,548/-). 6. Aggrieved, the assessee assailed the assessment framed by the A.O before the CIT(A). Observing, that the payments mentioned in Annexure A-2 Page 27 viz. (i) ₹ 7,50,00,000/-, dated 25.06.2012; and (ii) ₹ 2,00,00,000/-, dated 28.02.2013 were in the nature of proposed payments which were to be made on a future date, the CIT(A) deleted the addition made by the A.O. Also, while concluding as hereinabove, it was noticed by the CIT(A) that the claim of the assessee that it had not made any payments to S/sh. Avinash Bhosale Amit Bhosale was duly endorsed by the said persons. Apart ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of the ld. A.R that the delay involved in filing of the cross objection was not intentional but was backed by the aforesaid compelling circumstances. Accordingly, in the totality of the facts of the case before us, we are of the considered view that in all fairness the aforesaid delay of 36 days involved in filing of the cross-objection merits to be condoned. 8. We shall now first advert to the appeal of the revenue. The ld. Departmental Representative (for short D.R ) has assailed the deletion of the addition of ₹ 9,50,00,000/- that was made by the A.O under Sec. 69 of the Act, on account of alleged unexplained investments made by the assessee. It was averred by the ld. D.R, that now when the CIT(A) had accepted that the 07 entries (out of 9 entries) appearing in the loose document viz. Annexure A-2 Page 27 were the actual payments made by the assessee, therefore, there was no reason for him to have differently construed the similarly placed remaining 02 entries forming part of the said impounded document. It was averred by the ld. D.R that the CIT(A) was in error in differently construing the contents of the aforesaid 02 entries in the absence of any justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their firm for the consultancy services which were rendered by them for resolving certain claims and dispute with M/s Jasani Reality Pvt. Ltd. as regards the Oshiwada project of the assessee company. As regards the remaining 05 entries (out of 07 entries ), it was submitted by the ld. A.R, that the same were in the nature of advances that were given by the assessee for purchase of land at Village: Mundwa, Pune, which the assessee had proposed to acquire for setting up a residential-cum-commercial project. In order to fortify the aforesaid factual position, it was submitted by the ld. A.R, that the said factual position was confirmed by both the directors of the assessee company i.e S/shri Akshay R. Raheja Gopal Narang in their respective statements which were recorded under Sec. 131 of the Act, both at the time of the survey proceedings as well as post-survey proceedings. Also, it was submitted by the ld. A.R, that the said factual position was also confirmed by S/shri Avinash Bhosale Amit Bhosale in their respective replies to the notices under Sec.133(6), which were issued by the A.O to them in the course of the assessment proceedings. In fact, it was averred by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst entry (of 02 entries ), it was submitted by the ld. A.R, that an amount of ₹ 2,00,00,000/- with a corresponding date under the common head viz. date of payment was mentioned as 28.02.2013 . It was submitted by the ld. A.R, that it was the claim of the revenue that the 02 entries mentioned in the second part of the aforesaid impounded document viz. Annexure A-2 Page 27 referred to the payments which were made by the assessee to the aforementioned persons i.e S/shri Avinash Bhosale Amit Bhosale. It was submitted by the old. A.R, that if that would have been so, then it was impossible to comprehend as to how in the print out of the aforesaid impounded document viz. Annexure A-2 Page 27 that was taken as on 11.02.2013 , a payment of an amount of ₹ 2,00,00,000/- made on 28.02.2013 could have found a mention. It was averred by the ld. A.R, that a conjoint perusal of the contents of the aforesaid impounded document viz. Annexure A-2 Page 27, therein conclusively proved to the hilt that the 02 entries therein stated viz. (i) 28.02.2013: ₹ 2,00,00,000/-; and (ii) 25.06.2012: ₹ 7,50,00,000/- were the tentative payments which had yet not been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vinash Bhosale Amit Bhosale 5,00,00,000 01.01.2011 10.04.2012 465 1,52,87,671 1,33,76,712 1,14,65,753 95,54,795 76,43,836 38,21,918 Avinash Bhosale Amit Bhosale 5,00,00,000 01.01.2011 10.04.2012 465 1,52,87,671 1,33,76,712 1,14,65,753 95,54,795 76,43,836 38,21,918 Avinash Bhosale Amit Bhosale 5,00,00,000 01.01.2011 30.09.2012 638 2,09,75,342 1,83,53,425 1,57,31,507 1,31,09,589 1,04,87,671 52,43,836 Avinash Bhosale Amit Bhosale 5,00,00,000 01.01.2011 30.12.2012 729 2,39,67,123 2,09,71,233 1,79,75,342 1,49,75,342 1,19,83,562 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cut off date/base date of 01/01/2011 in each case. As regards the date mentioned on the extreme right side (on top) of the aforesaid impounded document, viz. Annexure A-2 Page 27, we find, that the same i.e 11.02.2013 is the date on which the print out of the aforesaid document was taken by the assessee and/or its accountant (from whose table the aforesaid document was impounded during the course of the survey proceedings). Admittedly, the payments mentioned in the first part of the aforesaid document i.e the 07 entries therein referred to the payments which were made by the assessee to the aforementioned persons, i.e S/shri Avinash Bhosale Amit Bhosale or their concern. As for the 02 entries (out of 07 entries ) against which an amount of ₹ 2,75,00,000/- each is stated, the same are in context of the charges paid by the assessee company to S/shri Avinash Bhosale Amit Bhosale or their concern for the consultancy services which were rendered by them for resolving certain claims and dispute pertaining to M/s Jasani Realty Pvt. Ltd. with regard to their Oshiwada project. As regards the remaining 05 entries (out of 07 entries ) aggregating to ₹ 25,00,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the aforesaid purchase of land on account of land acquisition issues and certain internal disputes that had emerged between the directors, therefore, the whole transaction had came to standstill. As observed by us hereinabove, the aforesaid 02 entries in the second part of the impounded document viz. Annexure A-2 Page 27 does not make any reference of the name and/or initials of the person/persons to whom the impugned payments aggregating to ₹ 9,50,00,000/- pertained. Also, as observed by us hereinabove, both directors of the assessee company i.e S/sh. Akshay R. Raheja Gopal Narang had categorically stated in their respective statements recorded under Sec. 131 of the Act, that the amounts mentioned against the 02 entries in the second part of the impounded document viz. Annexure A-2 Page 27 were the amounts which had yet not been paid to the aforementioned persons viz. S/sh. Avinash Bhosale Amit Bhosale. As is discernible from the orders of the lower authorities, we find, that the aforesaid factual position had categorically been stated by Shri Akshay R. Raheja, director of the assessee company in his statement recorded under Sec.131 in the course of the surve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that actually the said amount of ₹ 9,50,00,000/- (₹ 7,50,00,000 +₹ 2,00,00,000) was to be paid on the dates mentioned on page no.27 which was to be on these dates, but the same remained unpaid / yet to be paid. Q.24 Please refer to the page No.27 of the loose paper file found and impounded and marked as Annexure - A from your premise during the course of survey action wherein in reply to Q. No. 19 you have stated that column date of payment reflects the amounts paid on a particular date mentioned in the Date of Payment . Further, in reply to Q.No.20 to 22 you have stated that the amount of ₹ 9,50,00,000/- (₹ 7,50,00,000 + ₹ 2,00,00,000) which are stated to be paid on the dates mentioned in column date of payment , but you have replied that the same is yet to be paid and the same is inadvertently mentioned in column date of payment . Please explain the contradiction that on the same sheet out of 9 rows in 7 rows the amount reflected in 'amount paid' column is paid on the date referred in the same sheet on the other hand in two rows the amounts mentioned in the same column i.e. 'amount paid' is not paid. However, the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings on 09.05.2014 under Sec.131 of the Act. It was categorically affirmed by him that the payments aggregating to ₹ 9,50,00,000/- [₹ 7,50,00,000/- (+) ₹ 2,00,00,000/-] were though to be made to S/sh. Avinash Bhosale Amit Bhosale, however, the same had not been made till date. Relevant extract of the statement of Shri Gopal Narang recorded under Sec.131 on 09.05.2014, reads as under: . Q.19 Please refer to your answer in the above question related to the explanation of the page No.27 wherein you have stated that the amount has not been paid till date. But in the page No.27, it is clearly mentioned that the amount has paid and date of payment is 28.02.2013 (₹ 2,00,00,000/-) and 25.06.2012 (₹ 7,50,00,000/-). For ₹ 30,51,50,000/- you have accepted amount paid to Avinash Bhosale and Amit Bhosale but in same page amount of Rs,9,50,00,000/- you answer that amount to be paid to Avinash Bhosale and Amit Bhosale. Please explain this contradictory statement. Ans. Though the entries are appearing on the same page the payments were to be made have not been ma de up to date for amount of ₹ 9,50,00,000/- (₹ 7,50,00,000 and ₹ 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,50,000/- [₹ 2,75,75,000/- (+) ₹ 2,75,75,000/- (+) ₹ 25,00,00,000/-]. Although Sh. Avinash Bhosale in his statement recorded under Sec. 131, dated 03.03.2016, had confirmed the receipt of amounts pertaining to all the 07 entries , however, there was no mention in his statement of receipt of the amounts mentioned against the remaining 02 entries stated in the impounded document viz. Annexure A-2 Page 27. Also, it was stated by him that no interest payment was actually made by the assessee company to either of them. 14. We have deliberated at length on the issue under consideration, in the backdrop of the contentions advanced by the authorised representatives for both the parties, and the facts emerging from the orders of the lower authorities. Although, we are not oblivious of the fact that Sec.292C envisages a presumption that where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of search under Sec.132 or survey under Sec.133A, then it may in any proceedings under this Act, be presumed viz. (i) that, such books of account, other d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid impounded document viz. Annexure A-2 Page 27 was in itself printed on 11.02.2013 . Accordingly, in case, as canvassed by the revenue that the amount of ₹ 2,00,00,000/- was a payment that was made by the assessee on 28.02.2013, then it is difficult for us to comprehend that as to how such transaction could have been recorded in the impounded document, which as observed by us was printed as on 11.02.2013. As such, the aforesaid claim of the revenue is divorced of any logic and beyond comprehension. Apart therefrom, in the backdrop of the fact that the aforesaid impounded document viz. Annexure A2 Page 27 refers to calculation of interests at various rates, therein further fortifies the claim of the assessee that the amounts of ₹ 2,00,00,000/- and ₹ 7,50,00,000/- were though to be paid by the dates mentioned therein i.e 28.02.2013 and 25.06.2012, however, the same had not been paid till date. We find that the aforesaid factual position had also been affirmed by the aforementioned persons i.e S/sh. Avinash Bhosale Amit Bhosale, to whom as per the revenue the aforesaid payments were made by the assessee. In fact, we find that the revenue had not been able ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the aforesaid items purchased formed part of the work-in-progress of its project Windsor Grande . Further, in order to substantiate the genuineness of its aforesaid purchase transactions, the assessee placed on record supporting documents/details viz. bills, invoices, trail of emails, copies of orders, bank statements, and the photos of all the items lying/fixed at its project site viz. Windsor Grande. In order to verify the genuineness of the aforesaid purchase transactions, the A.O issued notices under Sec. 133(6) to the aforementioned parties. One of the party, namely M/s Priya Exim Pvt. ltd. complied with the aforesaid notice and submitted its reply. However, the summon which was subsequently issued by the A.O under Sec.131 to M/s Priya Exim Pvt. Ltd. was not complied with by the latter. On the other hand, the other party namely M/s Kotsons Impex Pvt. Ltd. did not submit any reply. It was observed by the A.O, that the assessee in the course of the survey proceedings had submitted that they had purchased the aforesaid items from M/s Sources Limited. It was the claim of the assessee, that the aforesaid concern had provided the bills of M/s Priya Exim Pvt. Ltd. and M/s K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh his inspector), the fact that the assessee had actually purchased the goods (forming part of its work-in-progress) stands proved and is not in dispute. In fact, in the backdrop of the peculiar purchase transactions, coupled with the fact that as per the information shared by the Sales tax department, Maharashtra, that the aforesaid two concerns viz. (i). M/s Priya Exim Pvt. Ltd; and (ii). M/s Kotsons Impex Pvt. Ltd., were involved in the business of providing accommodation entries/bills, without actually supplying the material in physical form, the A.O in our considered view taking cognizance of the fact that the assessee could not substantiate the genuineness of the impugned purchase transactions on the basis of irrefutable documentary evidence, had thus every good reason to conclude that the assessee had purchased the goods not from the aforesaid parties, but at a discounted value from the open/grey market. At the same time, we also cannot remain oblivious of the fact that one of the supplier party viz. M/s Priya Exim Pvt. Ltd. had complied with the notice issued by the A.O u/s 133(6) and had submitted its reply. But then, the aforesaid party had failed to put up an appearance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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