2011 (3) TMI 1043

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....rores purchased from M/s. Bermaco Industries Ltd. (hereinafter referred to as "the supplier"). The assessment was framed under section 143(3) of the Income-tax Act (hereinafter referred to as "the Act") at a total of Rs. 2,34,79,94,444. However, thereafter a notice under section 148 of the Act was served upon the assessee seeking to reassess the proceedings on the ground that the assessee had never purchased aforesaid machinery worth Rs. 6.97 crores from the supplier and it was a bogus purchase and, therefore, the assessee was not entitled to any depreciation thereupon which the assessee had claimed and was allowed in the assessment proceedings. Thereafter, the re-assessment order was passed by the Assessing Officer on 31st March, 2004 dele....

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....Ahuja, on the basis of which addition was made, was not supplied to the assessee by the Assessing Officer. It was also argued that no opportunity to cross-examine Mr. Viren Ahuja was provided; so much so even the report of the Settlement Commission on investigations made in this regard or the application preferred by the supplier before the Settlement Commission was not provided to the assessee. The assessee took a positive stand that the machinery was in fact purchased and installed, which was brought/transported from Mumbai to U.P. through ST 31. It is for this reason, the assessee even offered spot verification of the said machinery. On this request of the assessee contained in the aforesaid statement dated 6th December, 2004, the CIT(A)....

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....ntioned that as per the physical verification made on test-check basis, it could not be said that there was any discrepancy. He even found merit in the submissions of the assessee that the valves, the photographs of which were submitted, were physically lying installed in the factory and without these valves there could be no production. After receiving this report, the CIT(A) had deleted the addition made by the Assessing Officer and took the view that their machinery was in fact purchased by the assessee and, therefore, assessee was entitled to depreciation thereupon. The Income-tax Appellate Tribunal (for short "ITAT") has upheld this order of the CIT(A) after re-examining the entire issue and accepting the finding of fact recorded by CI....