TaxTMI 
TaxTMI 
2014 (9) TMI 100
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....ts and in the circumstances of the case, the CIT(A) has erred in law and on facts in not appreciating the findings of inquiries conducted by the department. 4. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 5. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 2. The assessee as per record in the year under consideration is a construction company which was involved in conceiving and constructing residential and commercial complexes for real estate builders. It is further seen that as per record the assessee was mainly carrying out development activity for Suncity Group of cases as most of the payments have been received from the Suncity Group on account of construction of various projects in different years. The record shows that the assessee declared net taxable income of Rs. 6,16,40,171/- on 13.09.2008 and that the assessee was subjected to search u/s 132 on 25.09.2008 alongwith Suncity Group of cases. Proceedings u/s 153A were initiated and notice u/s 153A dated 07.09.2009 was issued ....
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....ized documents is found reproduced at pages 3 to 5 of the assessment order at para 4.2. The same is extracted hereunder for ready-reference:- 4.2. Further enquiries in this regard was conducted and it came to notice that M/s Padmesh Realtors (P.) Ltd. has made total purchases of Rs. 24,25,68,850/- from a number of companies who were not found to be inexistence. The detail of these companies from whom purchases have been made were enquired and the amount as mentioned in the seized document is reproduced hereunder:- Party Name Registered Address Correspondence Address Amount (Rs.) Daga Trading Co. Pvt. Ltd. Y162, Loha Mandi, Naraina, New Delhi- 110028 Y162, Loha Mandi, Naraina, New Delhi- 110028 2590380.00 Delhi Trading Co. Y/14/17, Second Floor Loha Mandi, Naraina - 110028 Y/14/17, Second Floor Loha Mandi, Naraina - 110028 391114454.25 GUPTA SONS Sector-10, Plot No.13, Odeon Plaxa-II, M.L.U. Market, New Delhi Sector-10, Plot No.13, Odeon Plaxa-II, M.L.U. Market, New Delhi 1190.00 India Steels 4969/200 Ind. Floor Sirkiwalan Hauz Qazi Delhi-110006. 4969/200 Ind. Floor Sirkiwalan Hauz Qazi Delhi-110006. 3168375.75 ....
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.... found that the said property is a two storeyed building constructed on a plot measuring 450sq meters and that building can never be used for storing the building material. Enquiries conducted at the given address of the , company proved that none of such company Area, Delhi exists at that address.. Regarding the godown; it was submitted in the report that the building can never be used to store the building material. 2.5. In view of the above, the AO was of the view that it clearly demonstrated that company M/s Padmesh Realtors (P.) Ltd. did not exist at the address given by the assessee. In the circumstances he concluded that firstly the assessee has concealed the identity and the address of the company M/s Padmesh Realtors (P.) Ltd. and secondly wrong information with regard to the address has been given. 2.6. In view of these facts he concluded that the purchases and sale made by M/s Padmesh Realtors (P.) Ltd. became doubtful. Accordingly in order to enquiry into the genuineness of the purchase and sale further inquiries were conducted from parties from whom M/s Padmesh Realtors (P.) Ltd. claimed that purchases have been made. The outcome of the enqui....
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....f the above inquiries as per record show cause notice was issued to the assessee on 27.08.2010 which made the assessee aware that the inquiries from the firms/ companies from whom purchases are said to have been made by M/s Padmesh Realtors (P.) Ltd. are not inexistence. Similarly the contents of the inquiries made by the department that the companies from whom purchase are stated to be made are mere paper companies formed with the motive to provide accommodation bills. It was also confronted to the assessee that neither any purchases have been made by M/s Padmesh Realtors (P.) Ltd. nor anything has been passed on to the assessee and the expenditure debited in the P&L A/c infact as such was not genuine and also not admissible. As per para 4.5 of the assessment order it was further conveyed that M/s Padmesh Realtors (P.) Ltd. did not have any godown to store any raw material. In the said background the assessee was required to show cause as "to why the purchases made from these companies through M/s Padmesh Realtors (P.) Ltd. be not treated as bogus purchases and to explain why the same amount be not added to his income as false claimed of expenditure." 2.8. The assessee's repl....
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....by the AO. The same is reproduced hereunder for ready-reference in the words of the AO himself:- "4.6. The plea of the assessee has been examined, The assessee has given a general reply to the specific finding of the Department. There are definite evidences with the Department that on the first place M/s Padmesh Realtors (P) Ltd is not in the business of making any purchases of construction material from any companies. The enquiries made have also revealed that M/s Padmesh Realtors (P) Ltd do not have any godown to store the raw material. The enquiries have revealed to the extent that M/s Padmesh Realtors (P) Ltd do not even have an own independent office and the addresses given were false. Finally, the company was found to be at the address of Suncity Group of cases itself i.e., N-49 1st Floor, Connaught Place, New Delhi. M/s Padmesh Realtors (P) Ltd have also failed to exhibit that what was the mode of transportation of goods and before selling where these were stored. There is also no document with the assessee as through which transportation mode these l goods have been received by the assessee. &n....
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....hing was purchased nor anything was sold and the expenditure was finally claimed by M/s Odeon Builders (P) Ltd. by transferring the money to the A/e of M/s Padmesh Realtors (P) Ltd and finally to the account of paper companies. 4.10. In a similar case of bogus purchase, Hon'ble Delhi High Court in the case of CIT v La Medica 2001 250 ITR 575 Delhi held that when there are evidences to suggest that fictitious arrangement has been made to inflate the purchases, AO is right in treating the purchases as bogus within the meaning of section 37 of the Act. The fact of the case was that the assessee made purchases from an alleged seller who was not found at the given address. Summon u/s 131 were also issued to the alleged seller but he was not found to be there. The assessee failed to produce the party. Thereafter, a registered letter was sent which was also received back un-served. It is in this background that the AO treated the purchases as bogus purchases and made addition u/s. 37 of Income Tax Act, 1961. The addition so made was sustained by Hon'ble High Court. 4.11 The facts of the present case are identical to the....
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....nts in support of genuineness of purchases made from M/s Padmesh Realtors (P)Ltd. Copy of final reply dated 15.12.2010 filed during the course of assessment proceedings is annexed herewith as annexure - X (Page 1 to 7) and copy of documents filed alongwith the said reply dated 15.12.2010 are enclosed herewith as Paper Book-A (containing Page 1 to 871) and Paper Book - B (containing Page 872 to 1826). The said reply was filed during the course of assessment proceedings to substantiate the genuineness of purchases made by the assessee company from M/s Padmesh Realtors (P) Ltd. Paper Book - A ( Page 1 to 871 ) contains documents relating to purchases made by the assessee company from M/s Padmesh Realtors (P) Ltd. and Paper Book - B ( Page 872 to 1826) contains documents received from M/s Padmesh Realtors (P) Ltd. relating to purchases made by M/s Padmesh Realtors (P) Ltd. from various parties during the financial year 2007-08 relevant to Ass. Yr. 2008-09. From the replies and documents filed during the course of assessment proceedings the genuineness of the purchases made from M/s Padmesh Realtors (P) Ltd, has been duly established beyond any doubt. The Ld. Assessing Officer has not p....
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....eceived or transported through trucks owned by the assessee company having Regn. No. HR 38J 2599, HR 63 4567, HR 63 4568, HR 38F 2405, HR 38F 2409 & HR 38J 2600. (h) In support of the identity of M/s Padmesh Realtors (P) Ltd. following documents were filed during the course of assessment proceedings:- S.No. Particulars of documents filed during the course of assessment proceedings Refer to Page No of the Paper Book-A (i) Memorandum & Articles of Association Certificate of Incorporation issued by ROC 1 to 25 (ii) Photocopy of PAN card 26 (iii) Photocopy of Registration Certificate issued by V A T Deptt. (Sales Tax Deptt.) 27 (iv) Photocopy of Form No. 18 filed with ROC & 28 to 31 (v) Photocopy of NOC issued by land lady Mrs. Kamini Gupta for allowing use of business premises at A-102, Dream Apartment, Plot No.-14, Sector-22, Dwarka, New Delhi-110075 & proof of her ownership 32 to 37 (vi) Photocopy of NOC issued by M/s Kumar Ice Facto (P) Ltd. for allowing use of godown premises at Patpar Ganj, Industrial Area, Delhi-110092 alongwith proof of its ownership. 38 to 40 (vii) Photocopy of D....
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.... duly supported by invoice which contains all details of M/s Padmesh Realtors (P) Ltd. including its address & TIN (Sales Tax Regn. No.), date of sale, dispatch detail (mode of transportation), dispatch No. (Bilty/ GR No.), description of goods, quantity, rate, amount, sales tax charged, freight/cartage charged, total amount, particulars of F.No. 38 issued by Haryana Govt. / F.No. 47 issued by the Rajasthan Govt., address of M/s Odeon Builders (P) Ltd. & its TIN (Sales Tax Regn. No.) and terms of payment etc. (ii) Copy of GR/Bilty in support of Mode of Transport and copy of F.No. 38 issued by Haryana Govt./F.No. 47 issued by the Rajasthan Govt. were attached with each & every invoice. (iii) Except for very small payment, all payment were made by the assessee company to M/s Padmesh Realtors (P) Ltd. through banking channel and bank statement of assessee company duly shows payment made to M/s Padmesh Realtors (P) Ltd. against purchases made. (iv) M/s Padmesh Realtors (P) Ltd. has duly confirmed the transactions with assessee compa....
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....49 (ii) Uncertified Contract Work (WIP) 8,75,27,876 - - (iii) Total value of contract work 1,21,42,89,987 72,79,62,927 54,44,42,549 B Material Consumption 84,29,72,332 51,40,88,214 37,46,81,298 C % of Material consumption to total value of contract work (5) of B to A(iii) 69.42% 70.62% 68.82% 3.4. In order to support its claim the assessee further assailed the AO's conclusion demonstrating fallacy of the approach of the AO. It was argued that if for a moment the conclusion of the AO is accepted and the purchases of 19.39 crores is treated as bogus the result would be fallacious. For ready-reference relevant portion is extracted from the impugned order:- "On making adjustment to aforesaid trading results by treating the purchases made from M/s Padmesh Realtors (P) Ltd. during the F.Y 2007-08 relevant to A.Y 2008-09 amounting to Rs. 19,39,60,866/- as bogus on the basis of allegation made by the Ld Assessing Officer, the trading results of the assessee company will emerge as under:- S. No. Particulars Ass Yr 2008-09 (Rs.) Ass Yr 2007-08 (Rs.) Ass Yr 2006-0....
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.... that on the one hand the AO has completed the assessment of M/s Padmesh Realtors (P.) Ltd. for Ass. Yr. 2008-09 U/s 153A read with section 143(3) of the I.T.Act, 1961 accepting the position as such the trading results of M/s Padmesh Realtors (P.) Ltd. has been accepted and on the other hand he arbitrarily assumed the purchases made by the assessee company as bogus. 3.8. It was further claimed that although the assessee is not required to either explain or furnish the source of the source i.e the details of the purchases made by M/s Padmesh Realtors (P.) Ltd. from various parties however in view of the stand of the department, the assessee has obtained the necessary details and documents from M/s Padmesh Realtors (P.) Ltd.. Referring to these details and documents received from said concern which were stated to be filed during the course of the assessment proceedings the assessee claimed that the purchases made by the assesse were genuine. These submissions advanced are found reproduced at page 16 para 5 of the impugned order. For ready-reference they are extracted here under:- "(5) Genuineness of the Purcha....
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..../s Shri Ganpati Sales; M/s Daga Trading Company (P.) Ltd.; M/s Northern Steel & General Mills; M/s India Steels; M/s R.V. Mercantile (P.) Ltd. the specific documents placed on record were relied upon. 3.10. On the basis of these above details, it was submitted that these documents demonstrated the following facts:- "(d) The perusal of aforesaid documents shows the following:- (i) That all the purchases made by M/s Padmesh Realtors (P) Ltd. were duly supported by invoices issued by respective seller which contains all the details of the respective seller like their name, address, TIN (Sales Tax Regn. No.), date of sale, dispatch detail, description of goods, quantity, rate, amount, Sales Tax (V AT) charged, total amount, terms of payment and address of M/s Padmesh Realtors (P) Ltd. & its TIN (Sales Tax Regn. No.) etc. (ii) Except for very small amount, all the payments by M/s Padmesh Realtors (P) Ltd. to sellers were made through account payee cheques/ drafts/RTGS i.e. through banking channel only and bank statement of M/s Padmesh Realtors (P) Ltd. duly shows....
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....ficer from the day one but even the same was in the knowledge of Investigation Wing of the I. T. Deptt. who during the course of post search investigation made investigation to the subscribing of Compulsorily Convertible Debentures of Padmesh Realtors (P) Ltd. by Deutsche Bank AG Singapore amounting to Rs. 600 Crores. The Assessing Officer has also examined this issue during the course of assessment proceedings of M/s Padmesh Realtors (P) Ltd. and found the same to be genuine. Hence, the existence of M/s Padmesh Realtors (P) Ltd. was not in dispute at any point of time as alleged by the Ld. Assessing Officer. b) M/s Padmesh Realtors (P) Ltd was incorporated on 02.09.2006 vide Corporate Identity No. U-70109DL2006 PTC 152966 issued by ROC, NCT of Delhi & Haryana. During the financial year 2007- 08 relevant to Ass. Yr 2008-09, the Regd. office of M/s Padmesh Realtors (P) Ltd. was A-102, Dream Apartments, Plot No. 14, Sector-12, Dwarka New Delhi 110075 and warehouse at 3, Patparganj Indl. Area Delhi-l l0092. The said Regd. Office of M/s Padmesh Realtors (P) Ltd. was changed to N-49 ( Ist Floor) Connaught Place, New Delhi w.e.f. 08.09.08 and again changed to 1240 (yd floor) Kucha Mahaj....
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....4, Sector 22, Dwarka, New Delhi- 110075 with the consent of the owner of the flat i.e. Ms. Kamini Gupta. The Assessing Officer has neither brought to the notice of the assessee company the alleged recording of statement of Ms. Kamini Gupta nor allowed to confront with the same. In view of the same, no negative inference can be drawn against the assessee company on this count on the basis of the said alleged statement of Ms. Kamini Gupta. (3)Similarly after receiving assessment order, the assessee company came to know about alleged recording of the statement of Mr. Sanjay Aggarwal as stated on Page '6' of the assessment order. On making enquiry from M/s Padmesh Realtors (P) Ltd., the assessee company was informed that no person known as Sanjay Aggarwal was in employment of M/s Padmesh Realtors (P) Ltd. Therefore if any statement of Mr. Sanjay Aggarwal was recorded, it was of some unauthorized person and therefore has no relevance to the case of the assessee company. Further, the Assessing Officer has wrongly stated that Godown Premises i.e. at Plot No.3, Patparganj Indl. Area, Delhi- l l 0092 is constructed on a plot measuring 450 sq. meters. Infact the said Godown is const....
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....435 and assessed to I.Tax vide PAN AABCR8274R. Photocopy of documents in support of genuineness of purchase made from M/s R V Mercantile (P) Ltd. which includes photocopy of Invoices, confirmed copy of account for financial year 2007-08 & 2008-09, bank statement of M/s Padmesh Realtors (P) Ltd. from where cheques issued to M/s R.V. Mercantile (P) Ltd. were cleared, audited annual accounts of M/s R.V. Mercantile (P) Ltd. for financial year 2007-08 and photocopy of DVAT return filed by M/s R.V. Mercantile (P) Ltd. for 4th Quarter of financial year 2007-08 were duly filed during the course of assessment proceedings (Refer Page 1798 to 1826 of the Paper Book - "B" ). A perusal of these documents duly establishes the existence of M/s R.V. Mercantile (P) Ltd. and genuineness of transactions of M/s Padmesh Realtors (P) Ltd. with M/s R.V. Mercantile (P) Ltd. (5) On Page 7 & 8 of the assessment order, the Assessing Officer has given his finding with regards of M/s Shri Ganpati Sales. In these finding it is stated that some Ms. Rekha Sachdeva was residing in premises no. 30/7B, Gali No.6, Vishwas Nagar, Shahdara, Delhi-32 who has stated that one room on Ground Floor of the said premises wa....
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....from where cheques issued to M/s Sai Traders were cleared, IT return copy of Mr. Vinay Jain (Prop. M/s Sai Traders) for Ass. Yr. 2008-09, copy of audited annual account for financial year 2007-08 of M/s Sai Traders, copy of VAT(Sales Tax) return for financial year 2007-08 and photocopy of Sales Tax Regn Certificate of M/s Sai Traders [Refer Page No.936 to 1009 of the Paper Book B] A perusal of these documents duly establishes the existence of M/s Sai Traders and genuineness of purchases made by M/s Padmesh Realtors (P) Ltd from M/s Sai Traders. (7) para 4,5 and 4.6 of the assessment order, the Ld. Assessing Officer has alleged that M/s Padrnesh Realtors (P) Ltd. has made purchases from paper companies The said allegation of the Assessing officer is neither based on any substance nor based on any material brought on record. The Assessing Officer has made wrong allegation that M/s Padmesh Realtors (P) Ltd. has failed to exhibit the mode of transportation of goods and they do not have any godown facility to store the material. In fact mode of transportation has been duly reflected on each & every Invoice issued by M/s Padmesh Realtors (P) Ltd to the assessee company and also on the ....
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.... 1686 xx) M/s Daga Trading Company (P) Ltd. 1715 xxi) M/s Northern Steel & General Mills 1753 xxii) M/s India Steels 1785 xxiii) M/s R.V. Mercantile (P.) Ltd. 1804 & 1805 Further with regards to non-production of Managing directors or these companies, it is submitted that the Assessing Officer has never asked the assessee company to produce these persons Moreover, the assessee company has not purchased materials from these companies. The assessee company has not made purchase of materials from these companies rather made purchases from M/s Padmesh Realtors (P.) Ltd. who in turn made purchases from these companies. The assessee company cannot be asked to produce the directors of these companies as the onus to be discharged by the assessee company can be laid to explain the source but not source of the source. Hence, there was no failure on the part of the assessee company to discharge its onus on this account also. (9) In para 4.8 & 4.9 of the assessment order the Assessing Officer has himself stated that the assessee company has made payment through account payee cheques to M/s Padmesh Realtors (P) Ltd. The Assessing Officer has without....
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.... present case. (e) In the cited case the statement of the supplier was recorded in which he has stated that he was a petty employee with purchaser's sister concern whereas it is not so in the present case. In the cited case the rate at which purchases were made was high whereas it is not so in the present case. (f) In the cited case the seller couldn't produce any document in support of purchases of goods by him whereas it is not so in the present case. Infact in the present case the assessee company has obtained and filed all the documents in support of purchases made by its supplier i.e. documents relating to purchases made by M/s Padmesh Realtors (P) Ltd. In view of the above, it is clear that the facts of the case cited by Ld. Assessing Officer in his order are completely different to the facts of the present case and hence the judgment given in the cited case has no applicability to the present case." (Emphasis by bold texting provided by the Bench) 3.12. Apart from the above submissions on facts the legal position based on judicial pronouncements was also referred to....
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....see further addressing the correct address of M/s R.V. Mercantile (P.) Ltd submitted that the addresses at Amar Colony are based on Khasra numbers as well as in Blocks such as "A", "B", "C" etc. This fact it was stated can be verified from the Goggle search of the site of Mahanagar Telephone Nigam, New Delhi. Accordingly it was claimed that No.-"22" by itself does not exist and either there should be a Block mentioned or a Khasra Number and in very few cases only number may also be a sufficient address. Accordingly the address given was claimed to be the correct address. 3.19. Further addressing the alleged issuance of summons etc. to the parties from whom M/s Padmesh Realtors had made the purchases it was submitted that the assessee was never informed that summons u/s 131 were issued to the parties from whom M/s Padmesh Realtors (P.) Ltd. had made purchases nor has this fact been confronted to the assessee that no such company was found at the given address. The inference drawn was assailed on the ground that adverse evidence has been relied upon which was gathered at the back of the assessee which was not confronted. Similarly the recording of statements of Mrs. Kamini Gupta, Sh.....
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....n response to the said show cause notice dated 27-08-2010. (3) Clarification Regarding correctness of Address of M/s R.V. Mercantile (P) Ltd. The Assessing Officer in his order dated 24.12.10 has stated that in Amar Colony, premises number are based on Khasra numbers and also in blocks such as 'A', 'B' etc. He further concluded that simply number 22 does not exists and it appears that company has not given proper address. This conclusion of the Assessing Officer is not correct. In Amar Colony all the three situations exists i.e. in some part blocks are given, in some part Khasra No's are given and in some part simple No's are given. This facts can be verified from the google search of the site of Mahanagar Telephone Nigam, 'New Delhi. A perusal of the same shows that in Amar Colony, Main Rohtak Road of N angloi premises having No' s only also exists (i.e. without any block or Khasra No. etc.) Hence the assessee company has given the ful1 and right address of M/s R.V. Mercantile (P) Ltd. which was there till the assessment proceedings for Ass. Year 2008-09 were completed. (4) Clarification regarding Alleged Issuance of summons & Alleged recording o....
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....and even then it was not shown by him to the assessee but it was forwarded to the Tribunal and it was for the first time at the hearing before the Tribunal in regard to the preparation of the supplemental statement of the case that this letter was shown to the assessee. It will, therefore, be seen that, even if we assume that this letter was in fact addressed by the manager of the Punjab National Bank Ltd. to the ITO, no reliance could be placed on it, since it was not shown to the assessee until at the stage of preparation of supplemental statement of the case and no opportunity to cross-examine the manager of the bank could in the circumstances be sought or availed of by the assessee." (5) Declaration regarding evidences filed The evidences filed with your honour during the appellate proceedings are only those which were filed with the Assessing Officer during the course of assessment proceedings completed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961, No additional evidence has been filed before your honour. (6) Producing M.D. of padmesh Realtors (P.) Ltd. During the course of whole assessment proceedings, the Assessing Officer has never asked the assessee company to pro....
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....62,927 54,44,42,549 38,07,62,152 B Material Consumption 84,29,72,332 51,40,88,214 37,46,81,298 26,21,37,200 C % of Material consumption to total value of contract work (5) of B to A(iii) 69.42% 70.62% 68.82% 68.85% D Gross Profit 14,05,64,812 9,43,66,966 6,82,85,678 4,35,83,871 E G.P. Rate 12.48% 12.96% 12.54% 11.45% 4. Considering these submissions the CIT(A) came to the following conclusions:- "5. Finding on Grounds of Appeal: A. On a careful consideration of the assessment order and submissions filed by the appellant it is observed that the addition to income for Rs. 19,39,60,866/- has been made by the AO treating the entire purchases made by appellant from M/s Padmesh Realtors (P) Ltd. as bogus on the ground that the parties from whom M/s Padmesh Realtors (P) Ltd. has made purchases were not in existence. As against the above finding of the A.O. the appellant has contested the addition by raising several issues in the submissions filed, which are summarized as under.- (a) That in support of the identity of M/s Padmesh Realtors (P) Ltd., copy of Memorandum & Articles of A....
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....s of Padmesh Realtors (P)Ltd. By Deutsche Bank AG Singapore, amounting to Rs. 600 Crores. The Assessing Officer has also examined this issue during the course of assessment proceedings of M/s Padmesh Realtors (P) Ltd. and found the same to be accepted, as no adverse inference has been drawn . That therefore the appellant submits that the existence of M/s Padmesh Realtors (P) Ltd. was not in dispute at any point of time. (e) That the allegation that Ms. Kamini Gupta, owner of Flat no. A-102, Dream Apartments, Plot No. 14, Sector - 22, Dwarka, New Delhi-l l 0075 has stated in her statement that she has not heard the name of M/s Padmesh Realtors (P) Ltd. is incorrect. That M/s Padmesh Realtors (P) Ltd. has provided a copy of NOC issued by Ms. Kamini Gupta to M/s Padmesh Realtors (P) Ltd. for allowing use of Flat No.A- 102 Dream Apartment, Plot No. 14, Sector-22, Dwarka, New Delhi for business purpose by them alongwith photocopy of her passport and proof of flat ownership. Photocopy of these documents were duly filed during the course of assessment proceedings [Refer Page 32 to 37 of the Paper Book- A] That from a perusal of these documents it is duly established that M/s Padmesh Rea....
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....aving area of 450 sq.Mtrs and recording of statements of some person not related to M/s Padmesh Realtors (P) Ltd. in any manner whatsoever. Moreover, the Assessing Officer has neither brought to the notice of the assessee company the recording of the above statement nor was allowed any opportunity to confront the person who have given such statement. Hence, the said statement cannot be used against the assessee company i.e. no adverse inference can be drawn on the basis of the said statement given against the assessee company. (g) That on Page '7' of the assessment order the Assessing Officer has given his finding relating to M/s RV Mercantile (P) Ltd. that in Amar colony at Main Rohtak Road, Nangloi, New Delhi, there are blocks like A & B and only no. without Blocks like '22' does not exists. The said finding of the Assessing Officer is incorrect. In fact, in Amar Colony at Main Rohtak Road, Nangloi, New Delhi, the address, 22, AMar Colony, Main Rohtak Road. Nangloi, New Delhi does exists and in financial year 2007-08 relevant to Asst. Yr. 2008-09 M/s R. V. Mercantile (P) Ltd. was functioning from the said address, M/s R V Mercantile (P) Ltd. is an incorporated bo....
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....150310353 and assessed to Income Tax vide PAN BGDPS8184D. In support of genuineness of purchases made by M/s Padmesh Realtors (P) Ltd. from M/s Shree Ganpati Sales. the assessee company during the course of assessment proceedings has filed photocopy of Invoices, confirmed copy of account for financial year 2007-08. bank statement of M/s Padmesh Realtors (P) Ltd. from where cheques issued to M/s Shri Ganpati Sales were cleared, copy of I T. return for assessment year 2008-09 etc filed. [Refer Page No. 1652 to 1710 of the Paper Book-B] That a perusal of these documents duly establishes the existence of M/s Sai Traders and genuineness of purchases made by M/s Padmesh Realtors (P) Ltd. from Sai Traders. (i) That on Page '8' of the assessment order, the Assessing Officer has given his finding with regards to M/s Sai Traders. That the said finding itself shows that M/s Sai Traders was carrying on business at E-279, Nag Mandir Road, Shastri Nagar, Delhi-l l 0052. M/s Sai Traders was proprietary concern of Mr. Vinay Jain duly registered with VAT (Sales Tax) Deptt. vide TIN 07620277454 and assessed to l.Tax vide PAN AHLPJ8354L. In support of genuineness of purchases made by M/s Pa....
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....td. were not filed. This statement of the Assessing Officer is factually incorrect in as much as confirmed copy of account of all those parties from whom M/s Padmesh Realtors (P) Ltd. has made purchases during the financial year 2007-08 were duly filed during the course of assessment proceedings alongwith reply dated 15.12.2010. Further with regards to non- production of Managing directors of these companies, it is submitted that the Assessing Officer has never asked the assessee company to produce these persons. Moreover, the assessee company has not purchased materials from these companies and has rather made purchases from M/s Padmesh Realtors (P) Ltd. who in turn made purchases from these companies. That the assessee company therefore could not be asked to produce the Directors of these companies as the onus to be discharged by the assessee company can be to the extent of explaining the source of purchases and not the source of the source. That therefore there was no failure on the part of the assessee company to discharge it's onus on this account too. (l) That in para 4.8 & 4.9 of the assessment order the Assessing Officer has himself stated that the assessee company has....
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....corded in which he has stated that he was a petty employee with purchaser's sister concern whereas it is not so in the present case. vi) In the cited case the rate at which purchases were made was high whereas it is not so in the present case. vii) In the cited case the seller couldn't produce any document in support of purchases of goods by him whereas it is not so in the present case. In fact in the present case the assessee company has obtained and filed all the documents in support of purchases made by its supplier i.e documents relating to purchases made by M/s Padmesh Realtors (P.) Ltd. In view of the above, it is clear that the facts of the case cited by Ld. Assessing Officer in his order are completely different to the facts of the present case and hence the judgment given in the cited case has no applicability to the present case. (n) That the trading results of the year under appeal are similar to that of the previous years. The GP rate of the year under appeal is 12.48%, as against GP rate of 12.96% in A.Y 2007-08, 12.54% in AY 2006-07 and 11.45% in A. Y. 2005-06. No a....
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.... also not brought any cogent material on record to controvert the appellant's explanation and to hold that the purchases made by the appellant from M/s Padmesh Realtors Pvt. Ltd were bogus. From the observations of the AO in the assessment order it is seen that he has relied on the statements of certain third parties recorded by the Investigation Wing of the Department which is the foundation on which the case for disallowance is based apart from the fact recorded by the A.O. that summons issued to the parties from whom M/s Padmesh Realtors P. Ltd. has made the purchases have returned back unserved. When such is the position it was incumbent on part of the A.O. that the statements of these persons should have been confronted to the assessee, so that fair opportunity is given to the assessee to explain his position. There is no indication in the AO's order as well as the questionnaire issued by the A.O. that copies of statements have been provided to the assessee. It is also observed that "onus" of proving a fact has a changing attribute and it would keep shifting in the facts of a case. Now since the assessee had submitted detailed documentation relating to the purchases, ....
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.... has not provided the copy of such statements to the appellant, thus denying opportunity of cross examination to the appellant, who has prima -facie discharged the initial burden of substantiating the purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts and the fact of payment through cheques, & VAT Registration of the sellers & their Income Tax Return. In view of the above discussion in totality, the purchases made by the appellant from M/s Padmesh Realtors Pvt. Ltd is found to be acceptable and the consequent disallowance resulting in addition to income made for Rs. 19,39,60,866/-, is directed to be deleted. The whole issue can also be examined from another perspective too. It is seen that the GP rate/material consumption rate in case of the appellant for immediately previous AYs are 1l.45/68.85% (AY. 2005-06); 12.54/68.82% (A Y 2006-07); 12.96/70.62% (A Y 2007-08) respectively & which has been accepted by the department in the assessment orders passed u/s 143(3) r.w.s.153A for these assessment years on 24.12.2010 itself. If the finding of the AO. for the impugned assessment year are accepted ( that is the entire purc....
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....CIT, DR inviting attention to the Assessment Order and the submissions advanced by the assessee before the Ld. CIT(A) which it was argued has wrongly been accepted by him submitted that the Revenue is aggrieved by the conclusion drawn by the CIT(A) wherein he has completely ignored relevant facts and has allowed himself to be mislead by the paper trail of the assessee. The finding arrived at in the assessment order it was submitted is based on the investigations carried out at by the department wherein the submissions of the assessee have been considered and the Department has made further enquiries on the responses of the assessee in order to verify the correctness of the assessee's claim and at every step and every stage the enquiries reveal that the assessee's claim is hollow. Based on the detailed findings recorded in the assessment order it was his submission that on facts the impugned order deserves to be set aside and the assessment order be restored. The Ld. CIT DR expressing his submissions claimed that once the detailed arguments which he proposed to advance are considered the impugned order would be set aside and the assessment order would be upheld. 6.1. Since ....
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....en made by Padmesh Realtors Ltd., were issued. Each one of them were found non-existent but for one Ishwar and Sons Timber Traders from whom purchase of Rs. 57,200/- only had been made (Page 10 of AOs order). * NOC issued by Mrs. Kamini Gupta at Pg 32 of PB does not say that Padmesh Realtors Ltd., was operating from A-102, Dream Apartment, Plot No. 14, Dwarka, New Delhi. In fact page 36 of PB suggests that /s Odean Builders were constructing the said apartment. As per Municipal Law regulators, the said Apartment was being uses for residential purpose and could not have been used for commercial activity. * Page No. 38 is a NOC dated 16/1/2008 from Kumar Ice Factory (P) Ltd allowing Padmesh Realtors to use the said premise as go down. If the said NOC was dated 16/1/2008 then there is no reason why the said document would not have been seized on the date of search on 25/9/2008. Page No. 39 PB is the evidence of e-file return which is over written by hand. It is not possible to tamper with an e-file return. * No receipt of rent was found from Mrs. Kamini g....
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.... post search enquiries and in proceedings before the AO, M/s. Padmesh Realtors have been found to be non-existent. * Assessee has relied on Raj Kumar Jain Vs. ACTU 50 ITD 1 TM and CIT Vs. J.M.D. Computers & Communication (P) Ltd 20 DTR (Del) 317. Both the cases are distinguishable. * In Raj Kumar Jain the Ao did not have any evidence of household express. In the casse in hand, the AO has overwhelming evidence of bogus purchase. * In J.M.D Computers, the AO had accepted purchases. In the case in hand, purchases have not been accepted. * Another case relied upon by the AR is Fair Finvest Ltd 357 ITR 146(Del). In that case the AO had blindly followed the report of the Intelligence wing and had not done any Investigation. In the case in hand diligent inquiry has been done after getting a lead from the Investigation Wing. * The case only reflects proper paper work and documentation without any co-relation to ground realities. Filed enquiries, have overwhelming suggested non-existence of M/s padmesh Realtors. 7. The Ld. AR in....
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....t appeal there are only two issues on the basis of which the department has filed its case. 7.3.1. The first issue which has been raised by the department based on the assessment order is the identity of M/s Padmesh Realtors P. Ltd and the second issue is the genuineness of the purchases made by the assessee from M/s Padmesh Realtors P. Ltd which in turn has made purchases from various suppliers which has been doubted by the AO. It has been argued by the Ld. AR that the AO has based his order on the adverse inferences drawn on these two issues which the CIT(A) has discussed, addressed and considered at length on which reliance is being placed. 7.4. On behalf of the assessee addressing the first issue namely the allegation that M/s Padmesh Realtors P. Ltd is a paper company Ld. AR assailing the said inference referred to the various material on record brought to the notice of the AO submitted that facts have been ignored by the AO. Referral was made to page 5 & 6 of the Assessment Order wherein the AO addresses this allegation and considers the assessee's response on the basis of statement not confronted to the assessee and ignoring the documents executed by the very same perso....
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.... to 194 were referred to for the said purpose. For ready reference, we extract these submissions from the synopsis filed hereunder:- " It will also be important to refer to the financial statements of M/s Padmesh Realtors Pvt. Ltd for the assessment year under consideration which are placed at paper book pages 196 to 1994. Page 1984 is the balance sheet of this company which shows that it has raised money to the extent of Rs. 600 Crores by way of Compulsory Convertible Debentures from Deutsche Bank. Page 1981 is the profit and loss account which shows that besides making sales of Rs. 24,34,11,036/- (which includes sales to the assessee company of Rs. 19,39,60,866/-) it has earned interest income of Rs. 17,66,20,450/-. It has filed its return of income placed at paper book page 1962 showing taxable income of Rs. 2,34,42,494/- and paid taxes of Rs. 86,17,635/-. The address in the return filed is A-102, Dream Apartment, Plot No. 14, Sector 22, Dwaraka, New Delhi. Thus the issue of existence of this company stands established beyond doubt. 3.2 The AO's observation on page 5 and 6 have been duly explained by the assessee....
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....location of the go-down it was submitted was actually a plot measuring 2000 square meters which is evidenced by photocopy of NOC issued by M/s Kumar Ice Factory Pvt. Ltd to M/s Padmesh Realtors P. Ltd which is available on record before the AO as well as the CIT(A) and the very same Paper Book has been placed before the Bench. Assailing the action of the AO it was argued that if the address recorded by the AO was wrongly recorded then how can the assessee be penalized for it. It was contended that in the facts of the case NOC of M/s Kumar Ice Factory, Sales Tax documents and ownership of the said concern of the plot of 2000 sq. meters which has been allowed to be used by Padmesh Realtors is on record which cannot be ignored without any contrary evidence. The basis for ignoring the same based on the enquiry from a wrong person which was half-hearted and incomplete cannot be given a precedence. Accordingly the documentary evidence in the face of these half hearted enquiries it was submitted cannot be ignored. 7.10. Assailing the arguments advanced by the Ld. CIT DR that from the residential Flat No. A-102 Dream Apartments, Dwarka belonging to Mrs. Kamini Gupta the office of M/s Padm....
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....vation has been interpreted by the AO as an adverse observation to hold that R. V. Mercantile does not exist. The interpretation by the AO, it was submitted is not correct. It was his submission that if the address was not proper (correct address) then what stopped the AO to complete the enquiry. Inviting attention to paper book page 1930 which is a letter address to the AO dated 15/12/2010 where all the details about M/s Padmesh Realtors P. Ltd were provided it was submitted that the assessee in that letter had also stated that in case any other information/explanation is required the same would be furnished on hearing from the AO. Despite this clear submission where the assessee had furnished all leading evidences no enquiry was made by the AO. Inviting attention to letter dated 23/12/2010 copy of which is placed at page 1931 wherein reference is made to the some questionnaire in post such enquiries attention was invited to the fact that the assessee had stated that no details or material gathered by the Deptt has been provided to the assessee. It was submitted that the assessee had requested that copies of such queries reports so obtained be provided. It was emphasize that as fa....
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.... has not been responded to by the AO and the CIT(A) has taken note of this fact at page 47 para (h). Referring to the same it was pointed out that the Assessing Officer missed to note to down "16/3" prior to Abdul Aziz Road, Karol Bagh. The said concern it was pointed out was registered with VAT (Sales Tax Department's) whose specific TIN and PAN details had been provided to the AO in order to establish its genuineness. Photocopy of its invoices confirmed copy of accounts for the specific period were filed. Copy of Bank Statements of M/s Padmesh Realtors from where cheques were issued to M/s Ganpati Sales it was stated were filed along with copy of Income Tax Return for 2008-09 assessment year of the proprietor of the said concern was Mr. Amit Sharma. These evidences in support of the genuineness of transactions of M/s Padmesh Realtors P. Ltd who purchased the goods from said Ganpati Sales it was submitted has not been rebutted by any documentary evidence by the Revenue. 7.14. Addressing the facts of M/s Sai Traders attention was invited to the specific observations in the assessment order wherein as per the finding of the Assessing Officer in the said premises Smt. Kamlesh De....
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....the authorities and also form part of the Paper Book filed at pages 169-871 of the Paper Book. These are the same copies which were filed before the AO in reply dated 15.12.2012. Addressing the concern of storage of the material by M/s Padmesh Realtors it was reiterated that it was stored at godown at 3, Patparganj Industrial Area which was a plot measuring 2000 sq. meters. Accordingly it was argued the assessee had fully discharged onus with respect to mode of transportation as well as place of storage godown. 7.17 Assailing the allegation of the AO addressed at page 10 para 4.7 that the assessee had not filed confirmations from these parties, heavy reliance was placed upon the finding of the CIT(A) recorded in para (k). A perusal of the same it was submitted would show that the AO has been found to record incorrectly. It was submitted that confirmed copy of account was filed in the reply dated 15/12/2010 before the AO during the assessment proceedings of all the parties from whom M/s Padmesh Realtors had made the purchases during the relevant period. Apart from this it was argued that the allegation of the AO qua the non-production of the Managing Directors of these companies hav....
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....nt proceedings and at no stage this issue was brought to the notice of the assessee by the AO. On the contrary it was submitted the assessee has led sufficient evidence in support of its purchases. Referring to the material available on record it was submitted that infact vide letter dated 23.12.2010 the assessee had specifically asked the AO to provide copies of the enquiry or reports available if any so that the assessee company can reply to the same. It was submitted that ignoring these facts the AO has drawn inference contrary to the evidence of the suppliers which are placed in the Paper Book-874 to 1026. Specific attention was invited to page 39 of the impugned order para 4(a) of the same and it was argued that no adverse evidence has been led by the AO or the department to rebut this in the present proceedings. 7.20 Addressing the para-wise reply to the synopsis of the department it was submitted that it is a fact on record that the assessee is engaged in the construction activities and Suncity is one of its major customers. M/s Padmesh Realtors, it was submitted is a subsidiary company of Sun City Group and as per arrangement it has supplied material purchased from M/s Pad....
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....long assessee has stated that the address of the M/s Padmesh Realtors is A-102, Dream Apartment, Plot No-14, Sector-22, Dwarka, Delhi. This fact is evident as spot verification was also carried out by the department. The ownership of the said flat was with Mrs. Kamini Gupta which also is a fact and the various documents available on record demonstrate that the said address was the registered office of Padmesh Realtors. 7.20.5 It was argued that the allegation that the claim of godown was wrong was based on the statement of Mr. Sanjay Aggarwal who had no occasion to speak for Padmesh Realtors or M/s Kumar Ice Factory and the link with them has not been established by the department. On the contrary the godown facilities utilised were Plot No. 3, Patparganj Industrial Area in the name of Kumar Ice Factory whose documents were made available before the AO and have not been contradicted. The enquiry it was argued was conducted on the wrong address by the department and also on the wrong person as such there is no reason why the evidence on record in support of the claim of godown facilities can be ignored. 7.20.6. Addressing the allegation that summons were issued it was submitted tha....
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....s, Grand Park, Hauj Khas, Pitampura etc. It was submitted that if the business is running from the DDA Apartment it cannot be said that the business was not genuine. 7.20.9. Addressing the departmental objection to the user of godown of Kumar Ice Factory it was submitted the claim is supported by the NOC available on record given at the time of VAT registration which is a statutorily required by the VAT authorities. The objections of the Revenue that it was a tampered document were assailed on the ground that it was filed only in support of the claim that the area of the plot was 2000 sq. meters and the arguments that why it was not found in the course of this search it was submitted is for the search party to decide and it is not the fault of the assessee to get every document seized in the course of the search. It was emphasized that VAT registration is handled by VAT advocate /consultant. The ownership of these premises by Mrs. Kamini Gupta i.e the office address and M/s Kumar Ice Factory i.e the godown is not in any doubt. The fact that they were not found in the course of the search cannot by the assessee's fault the assessee's claim is demonstrated by documents of st....
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....orrect as the CIT(A) it has been submitted has dealt with them at length and also considered the documents and the explanation as such it was stated that it was not incumbent upon him to carry out any further inquiry. 7.20.13. Vide para 19 the allegation of the department that the assessee is blindly following the principle laid down in Kishan Chand Cellaram is assailed. It is stated in the synopsis that the CIT(A) has dealt with the evidence which was before the AO and on that basis of the same has reached a satisfaction that the purchases were genuine. 7.20.14. Reliance placed by the department on CIT vs Sonal Construction 260 CTR (Del) 37 (para 20) and JCIT vs Swarup Vegetable Products Industries 96 ITD 468 (Del) (para 13) was stated to be misplaced as the facts were entirely distinguishable. For ready reference we reproduce the distinction drawn in Ld. AR's own words from the synopsis filed:- As regards the judgment of CIT vs. Sonal Construction 260 CTR (Del) 37, the issue was the addition made by the AO on the basis of the seized documents and the material which indicated that assessee has made inv....
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....neering Works. The AO made further enquiry from the bank account of the A.S. Engineering Works and it transpired that there was no other transaction except the so called receipt of Rs. 20 Lacs. The CIT(A) has deleted the addition on the ground that the assessee has not shown the capital gain. The receipt of Rs. 20 Lacs could not be considered as unexplained cash credit. It was in this background that the Tribunal has stated that merely because the amount of capital gain has been shown by the assessee cannot be a ground for deleting the addition and the CIT(A) was supposed to give a positive finding of fact regarding the sale of the machinery and the alleged receipt of Rs. 20 Lacs from A.S. Engineering Works. The allegation levied by the AO was not rebutted by the assessee at any stage and even by the CIT(A) and there was negative finding of the CIT(A) that assessee having shown the sale proceeds as capital gain the same cannot be taxed under Section 68. Thus there was an issue of a positive finding about the actual nature of the amount received which the CIT(A) has not given a finding and that is why the matter was referred back to the CIT(A). In the present case there was no disp....
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....e principle decided in the case of Raj Kumar Jain vs ACIT 50 ITD 1 and ACIT vs Anima Investments Ltd. 73 ITD 125 was relied upon and the distinction drawn by the Revenue was stated to be of no relevance on the following grounds :- 23. "The judgment of Raj Kumar Jain v ACIT 50 ITD 1 (tm) and ACIT vs Investments Ltd. 73 ITD 125 are in support of the contention that the Revenue is seeking a second innings to make out a case having failed make in the first innings. In Raj Kumar Jain case also the plea of the revenue was that looking to the standards and the facts and circumstances has gathered during the course of the search, the drawing are very low and that is why the additions were made and this explanation given by the assessee regarding the drawings, the revenue wanted the matter to be set asided for further examination. It was in this context the Tribunal has refused to set aside the matter for further examination. This exactly is the case here also. The AO in the assessment order has not made any adverse observation or comment about the documents and evidences submitted by the assessee during the course of the h....
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....t an impossible G. P. rate in the nature of trade. Cognizance of this fact has been taken of by the CIT(A) in his order. On the basis of these facts evidences and arguments it has been submitted vide para 27 of the synopsis that it is a case where search has been carried out on the premises of the assessee and nothing incriminating qua these purchases made has been found in the absence of any incriminating material adverse inference cannot be drawn on the basis of the documents relied upon by the Revenue. 8. We have heard the rival submissions and perused the material available on record. The decision and judicial precedents relied upon by the parties have been taken into consideration. In the facts of the present case it is seen that the assessee admittedly has been carrying out development activity for Sun city Group of Companies and has on the basis of most of the receipts received from the Sun city Group returned an income of Rs. 6.16 crore odd on 13/9/2008. In view of the fact that the assessee along with Sun city Group of cases was subjected to search u/s 132 on 25/9/2008 proceedings u/s 153A were initiated and in response to notice u/s 153A, the same income was returned by ....
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.... on CIT Vs. La Medica, cited supra the AO concluded that the assessee had made a fictitious arrangement to inflate the purchase. The record shows and as has been addresssed at great length in the earlier part of this order that in the course of the arguments advanced by the Revenue the action of the CIT(A) in accepting the assessee's claim has been assailed on the reasoning that the assessee was unable to give the correct address of M/s Padmesh Realtors and at the address given it was revealed that Mrs. Kamini Gupta owner of the said premises has denied any knowledge of the existence of the such company at the given address. The Ld. CIT DR has also stated that the said concern had no godown facilities for storage and reliance has been placed upon the statement of Shri Sanjay Agrawal who stated that there was no such company. The Ld. CIT DR has further assailed the action of the CIT(A) on the ground that the purchases made by M/s Padmesh Realtors were also from non-existent companies as summons to all the entities from whom purchases are stated to be made have returned back unserved. The exponential growth in lodging sales of Rs. 24 crore odd within 45 days by a company incorpor....
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....rgued that based on suspicions and surmises the claim of the assessee based on documentary evidence on record which remains unrebutted by any evidence cannot be set aside and the issue restored for causing another set of enquiries in the absence of any material warranting such a decision. Apart from reiterating the arguments made before the CIT(A) which have been addressed at length in the earlier part of this order the arguments of the Ld. CIT DR casting doubts on the assessee's claim by advancing arguments to cause doubts by suggesting that Padmesh Realtors incorporated on 16/1/2008 has shown exponential growth in 45 days in order to only cause doubts as the statement even if correct does not prove that the entity's existence and transactions are bogus. The assertion has been assailed as having been based on incorrect facts and suspicions. It has been stated that the period is 75 days and not 45 days and Padmesh Realtors being a subsidiary of the Suncity Group for whom the assessee was largely carrying out construction activity; the purchases as per arrangements were made from Padmesh Realtors as such the volume of sales made by Padmesh Realtors may create a suspicion in ....
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....py of NOC issued by M/s Kumar Ice Factory for allowing use of go-down premises at Patparganj along with PAN, IT Return etc. various other documents relied are found reproduced at pages 10 to 12 in para 4 of the impugned order and on the basis of these arguments and evidences the conclusion arrived at has been heavily relied upon in the course of the hearing by the Ld. AR and none of these documents it has been repeatedly emphasized have been assailed by the Revenue. In the facts as they stand as far as the existence of M/s Padmesh Realtors and the transactions recorded in the normal course of business being genuine it has been argued the Revenue's case has no merit. 8.2. It is seen that the Department has built its case on the statement of Mrs. Kamini Gupta the owner of Flat No. A-102 Dream apartments, Plot No. 14, Sector 22 Dwarka who is known to have stated that she does not know M/s Padmesh Realtors. As opposed to this statement not confronted to the assessee there is on record the NOC issued by the very same land lady for allowing the use of the very same flat for the business purposes of Padmesh Realtors; on the basis of which NOC VAT Registration has been issued to M/s P....
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....nger by the assessee who has instead placed on record before the AO the correct address of M/s Kumar Ice Factory who had 2000 square meters of area which was allowed by the owner to be used as godown by M/s Padmesh Realtors for their storage of material. Since the statement of an unconcerned person and enquiry at the wrong address is the only basis of the allegation that M/s Padmesh Realtors did not have godown facilities the same has no relevance in the face of documents issued by Statutory Authorities listed in the impugned order and discussed at length in the earlier part of this order. In the absence of any contrary evidence, we find ourselves unable to come any other conclusion than the conclusion arrived at by the CIT(A). Being satisfied by the reasoning and fining on consideration of the material available on record the departmental arguments are rejected. 8.4. The Revenue in the course of the arguments has also placed heavy emphasis reliance on the allegations of the AO that how the goods were moved from the go-down facilities of M/s Padmesh Realtors to the assessee has not been addressed. It is seen that the allegation has no basis as the same have been dealt with by the ....
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....ly Ishwar Sons from whom purchases of about Rs. 50,000 were made only confirmed the transaction directly to the department. The confirmed copies of all these 23 entities filed by the assessee before the AO alongwith their addresses copies of Revenue filed invoices; the payments received through cheque; VAT, Sales Tax Registration PAN, TIN number have all been ingorned on the plea that these 22 entities out of 23 did not respond to the summons issued as they were returned with the comment that no such company/entity found. Further the filing of these documents by the assessee without the AO specifically calling forth for the same it has been aruged suggested close proximity with assessee as such the documents were "neutral". As opposed to the said arguments the assessee has consistently assailed the stand of the Assessing Officer on the ground that the summons stated to be issued to the entities which allegedly came back unserved with the comment no such concern found may not have much relevance as nothing has been brought on record by the Revenue to show that at what addresses the alleged summons were addressed; Secondly, reliance placed on this alleged fact has been argued to be m....
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.... concern for 2008-09 assessment year along with confirmed copy of account PAN ledger account, bank statement of M/s Padmesh Realtors etc has been filed as such all necessary particulars were available. Coming to the third entity enquired namely M/S R. V. Mercantile Pvt. Ltd., the address of the said concern as per the assessment could not be located in regard to the same the assessee has contended that the AO has disbelieved the existence of the said concern on the belief that the company has not given proper address but no efforts as per record were made to obtain the correct address on the contrary the assessee has been petitioning the Assessing Officer that in case any further evidence is required, he may be called upon to do so which fact has not been assailed by the Revenue. It is seen that in support of the claim that it is a genuine concern a copy of VAT return financial year 2007- 08 has been filed; sale invoices issued to M/s Padmesh Realtors along with confirmed copy of account with PAN for F.Y 2007-08 , 2008-09 have been filed; along with bank statement of M/s Padmesh Realtors showing payment of purchases. Similarly, it is seen that for each of the other remaining 20 con....
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....terial available on record the finding of the CIT(A) is confirmed. The arguments that signatures in invoices apper to be different is not backed by any document in support of the claim. Similarly the arguments that non-production of the directors of 23 entities from whom goods were purchased by Padmesh Realtors which were further sold to the assessee cannot be a ground to ignore the evidence available on record as not only the assessee has successfully demonstrated that no such requirement was ever communicated to it but even otherwise the occasion to call the assessee to produce the suppliers of the supplier does not arise. The onus placed upon the assessee stands discharged. The departmental arguments why certain documents were not found during the search has no merit and stands responded to as it is not for the assessee to suggest which documents should be seized. Similarly the functioning of Padmesh Realtors from a residential address for a certain period of time authenticated by Statutory documentation whatever it may lead to most definitely does not lead to the conclusion that the concern was not genuine as there is more than sufficient evidence on record which we have addres....