TaxTMI 
TaxTMI 
2014 (9) TMI 100
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....; 3. On the facts 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 i....
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....f the companies from whom purchases had been made were enquired into by him and were found to be not in existence. The specific details of these companies as found mentioned in the seized 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 S....
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....l recorded during survey operations u/s 133A of the IT Act 1961 on M/s Padmesh Realtors Pvt. Ltd at its godown at Plot no-3, Patparganj Industrial stated that the said premises was not given on lease/rent to M/s Padmesh Realtors Pvt. Ltd. Further on inspection, It was 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 ....
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....erty belonged to her mother-in-law. She further stated that one part of the mentioned premises was given on rent to M/s Sai Traders about 16 years back. They had left these premises and the current address and whereabouts were not known to her. Hence, the summons could nto be served. 2.7. In the background of 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 g....
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....ealtors (P.) Ltd. also failed to explain that what was the mode of transportation of goods and before selling these goods where were they stored. He was also of the view there is no document with the assessee to show how these were received by the assessee etc. Accordingly for the reasons set out in para 4.6 to para 4.12, the explanation offered by the assessee was not accepted 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 ....
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.... 4.9. The enquires made makes the modus operandi very clear. The assessee has used the group company M/s Padmesh Realtors (P) Ltd as a conduit to inflate the expenditure. M/s Padmesh Realtors (P) Ltd have finally disbursed the payments to a number of companies in order to equalize the sale with the purchase but the fact remains that neither anything 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. ....
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....ore the AO. It would be appropriate at this stage to extract these submissions from the impugned order itself:- "(3) During the course of assessment proceedings u/s l53A read with section 143(3) of the LT. Act, 1961, the assessee company has filed all the details & documents as sought by the Ld. Assessing Officer including documents 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 ....
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....r M/s Suncity Projects (P) Ltd. (f) Except for the payment of very small amount, all payments against purchase of goods were made to M/s Padmesh Realtors (P) Ltd. through account payee cheques/ account payee drafts/ account payee RTGS etc. (g) The goods purchased from M/s Padmesh Realtors (P) Ltd. were either transported through goods carrier for which Bilty/G.R's were received 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....
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....ts it was canvassed that the claim was genuine and these documents on record demonstrate this fact. On the basis of these documents it was canvassed that they demonstrated the correctness of assessee's claim. These submissions found advanced are found reproduced at page 13 of the impugned order and are extracted hereunder for ready-reference:- "(j) The perusal of aforesaid documents shows the following:- (i)That all the purchases made by the assessee company from M/s Padmesh Realtors (P) Ltd. were 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 Transpo....
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....in all these assessments. No addition/disallowance has been made in relation to purchases in any of these assessments. (iii) No incriminating material has been found during the search & seizure operation u/s 132 of the IT Act, 1961 carried out on various business premises of the assessee company and residential premises of its directors. iv) The comparative trading results of the assessee company for the last three years are as under:- S. No. Particulars Ass Yr 2008-09 (Rs.) Ass Yr 2007-08 (Rs.) Ass Yr 2006-07 (Rs.) A (i) Certified Contract work 1,12,67,62,111 72,79,62,927 54,44,42,549 (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 conclus....
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.... CIT vs Leaders Valves (P.) Ltd. (2006) 285 ITR 435 (P&H) wherein the Hon'ble High Court had declined to interfere with the findings of the Tribunal pertaining to deletion of the addition made on account of alleged bogus purchases on the ground that it was impossible to manufacture the goods shown to have been manufactured by the assessee out of remaining purchases if the AO's conclusion is accepted. 3.7. It was further submitted that in the year under consideration M/s Padmesh Realtors (P.) Ltd. had made purchases of material amounting to Rs. 24,25,69,850/- and made sales of Rs. 24,34,11,036/- and out of this sales to the extent of Rs. 19,39,60,866/- have been made to assessee company. Referring to these facts it was his submissions 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 ....
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....details of the parties who had sold the material to M/s Padmesh Realtors who thereafter sold the material to the assessee the claim was supported. The relevant details by way of a chart are available at pages 17 to 27 of the impugned order and against the names of these 23 sellers namely M/s Gupta Sons; M/s Ishwer & Sons Timber Trader; M/s Shree Sai Trading Co.; M/s Sai Traders; M/s Siddhi Vinayak Enterprises; M/s Shree G.J. Trading Co.; M/s Kamdhenu Industries Ltd.; M/s Rima trading Co.; M/s Shri Krishna Steels; M/s Shiv Trading Co.; M/s Shiv Om Sales Corporation; M/s Shree Murli Enterprises; M/s Sunrise Enterprises; M/s N.P. Sales Corporation; M/s Shree Shyam Enterprises; M/s Swastik International; M/s Delhi Trading Company; M/s Kasliwal Enterprises; M/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:- ....
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....ted to be distinguishable on facts. The said reply is also extracted hereunder for ready-reference from the impugned order itself:- "Point wise reply to AO's version (1) In para 4.3 & 4.4 of the assessment order, the Assessing Officer has wrongly concluded the non-existence of M/s Padmesh Realtors (P) Ltd. on account of the following :- a) The allegations that assessee could not explain the actual address of M/s Padmesh Realtors (P) Ltd. is completely baseless. At no point of time, the assessee company expressed its ignorance about the said company. The address of M/s Padmesh Realtors (P) Ltd. was never sought by the Assessing Officer from the assessee company. In fact, the existence of M/s Padmesh Realtors (P) Ltd. was not only in the knowledge of the Assessing Officer 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 proceedin....
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.... (P) Ltd. (2) The allegation that Ms. Kamini Gupta, owner of Flat no. A-102, Dream Apartments, Plot No. 14, Sector - 22, Dwarka, New Delhi-110075 has stated in her statement that she has not heard the name of M/s Padmesh Realtors (P) Ltd. is incorrect. 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] A perusal of these documents duly establish the fact that M/s Padmesh Realtors (P) Ltd. was functioning from Flat No. A-102, Dream Apartments, Plot No. 14, 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 ass....
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....nt against the assessee company. (4) 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 do exists and in financial year 2007-08 relevant to Ass. 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 body vide CIN - U65999 TN1999PTC041948 issued by ROC Chennai, Tamil Nadu having paid up capital of Rs.l0.50 Crore, registered with sales tax Deptt. vide TIN 07040340435 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....
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....hes the existence of M/s Shri Ganpati Sales and genuineness of purchases made by M/s Padmesh Realtors (P) Ltd. from M/s Shri Ganpati Sales. (6) On Page '8' of the assessment order, the Assessing Officer has given his finding with regards to M/s Sai Traders. The said finding itself shows that M/s Sai Traders carrying on business at E-279, Nag Mandir Road, Shastri Nagar, Delhi-ll0052 for a very long period till April 2008. M/s Sai Traders was proprietary concern of Mr. Vinay Jain duly registered with VAT (Sales Tax) Deptt. vide TIN 07620277454 and assessed to I.Tax vide PAN AHLPJ8354L. In support of genuineness of purchases made by M/s Padmesh Realtors (P) Ltd from M/s Sai Traders, the assessee company has filed 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 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 Trader....
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.... Account was filed during the course of assessment proceedings Refer Page No. of Paper Book-B i) M/s Gupta Sons 875 to 876 ii) M/s Ishwar & Sons Timber Traders 880 to 882 iii) M/s Shree Sai Trading Co. 917 & 918 iv) M/s Sai Traders 971 & 972 v) M/s Siddhi Vinayak Enterprises 1034 vi) M/s Shree G.J.Trading Co. 1078 & 1079 Vii) M/s Kamdhenu Industries Ltd. 1170 to 1173 viii) M/s Rima Trading Co. 1247 to 1249 ix) M/s Shri Krishna Steels 1324 to 1326 x) M/s Shiv Trading 1367 & 1368 xi) M/s Shiv Om Sales Corporation 1400 & 1401 xii) M/s Shree Murli Enterprises 1441 xiii) M/s Sunrise Enterprises 1477 xiv) M/s N.P.Sales Corporation 1516 xv) M/s Shree Shyam Enterprises 1553 to 1555 xvi) M/s Swastik International 1571 xvii) M/s Delhi Trading Company 1591 xviii) M/s Kasliwal Enterprises 1618 xix) M/s Shri Ganpati Sales 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.)....
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.... case as shown below:- (a) In the cited case the Assessing Officer has brought material on record to prove that the supplier has no means to carry on business and he is in employment with sister concern of the purchaser. No such fact exists in the present case. No material has been brought on record by the Assessing Officer to suggest the suppliers of M/s Padmesh Realtors (P) Ltd. were its employee. (b) In the cited case the bank account of the supplier was opened with the introduction of the purchaser whereas it is not so in the present case. (c) In the cited case the goods were not accepted by the purchaser but was accepted by some irrelevant person whereas it is not so in the present case. (d) In the cited case supplier has immediately withdrawn the payment from his bank account whereas it is not so in the present case. (e) In the cited case the statement of the supplier was recorded in which he has stated....
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....ulwant Rai 291 ITR 36 (Delhi High Court); (v) Dhakeshwari Cotton Mills Ltd. vs CIT (1954) 26 ITR 775 (SC); (vi) CIT vs Mrs. Sunita Vachani 184 ITR 121 (Delhi High Court); (vii) CIT vs Anupam Kapoor 299 ITR 179 (P&H High Court). 3.14. A perusal of the impugned order further shows that apart from the submissions dated 27.02.2012 on behalf of the assessee, further submissions were also made dated 19.03.2012 which are extracted at pages 38-44 of the impugned order in para 4.1. 3.15. A perusal of the same shows that the assessee assailed the action of the AO co-relating the documents seized during the search & Seizure with the documents available in the books of accounts of the assessee and further co- relating the same with the copy of the account of M/s Padmesh Realtors (P.) Ltd. in assessee's books of accounts which could be verified from the detailed documents placed before the AO. 3.16. Apart from that photocopies of the show cause notice issued by the AO were also filed alongwith the replies filed on behalf of the assessee. 3.17. The assessee further addressing the correct address of M/s R.V. Mercantile (P.) Ltd submitted that the addresses at Amar Colony are based....
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....n 25.09.2008 at Sl No. SCN-(AS-3) Page 102 to 109 & 111. A perusal of these document shows that Page No. 102 to 109 relates to copy of account of M/s Padmesh Realtors in the books of M/s Odeon Builders (P) Ltd. for financial year 2007-08 relating to various work sites of Mis Odeon Builders (P) Ltd. and Page No. 111 relates to summary of these transactions. The transactions given in these documents were duly recorded in the regular books of accounts of the assessee company for financial year 2007-08 which can be verified from the documents filed during the course of assessment proceedings [refer to Page No.51 to 71 of the Paper book' A' ]. The contents of seized material IS same as shown in the books of accounts of the assessee company for financial year 2007-08 (2) Show Cause dated 27.08.2010 As desired, we are enclosing herewith photocopy of show cause notice dated 27.08,2010 issued by Assessing Officer, Central Circle-l , New Delhi for Ass. Year 2008-09 and photocopy of replies filed by the assessee company during the course of assessment proceedings in response to the said show cause notice dated 27-08-2010. (3) Clarification Regarding correctness of Address of ....
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....th the same to the assessee company (Affidavit of one of the directors of the assessee company namely Sh. Ram Niwas Bansal to this effect is enclosed herewith). In view of these circumstances these statements cannot be relied upon and no adverse inference can be drawn against the assessee company on the basis of alleged statements. The assessee company was neither informed about recording of such alleged statements nor any opportunity was afforded to it to cross examine these persons. Reliance on the statements of third parties who were never examined by the Assessing Officer himself and that too without providing any opportunity to the assessee to cross examine these parties is against the principle of natural justice and cannot be sustained in law. In this connection reliance is placed on the judgement of Hon'ble Supreme Court in the case of Kishinchand Chellaram Vs. CIT(1980) 125 I.T.R 713 (SC) wherein the Hon'ble Supreme Court has held as under.- "that, according to the ITO, this letter was traced by him and even then it was not shown by him to the assessee but it was forwarded to the Tribunal and it was fo....
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.... Ass Yr 2007-08 (Rs.) Ass Yr 2006-07 (Rs.) Ass Yr. 2005- 06 (Rs.) A (i) Certified Contract work 1,12,67,62,111 72,79,62,927 54,44,42,549 38,07,62,152 (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 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% 3.22.1. The adjusted chart where Rs. 19 crore odd is treated as bogus extracted from page 42 of the impugned order is reproduced hereunder:- S. No. Particulars Ass Yr 2008-09 (Rs.) Ass Yr 2007-08 (Rs.) Ass Yr 2006-07 (Rs.) Ass Yr. 2005- 06 (Rs.) A (i) Certified Contract work 1,12,67,62,111 72,79,62,927 54,44,42,549 38,07,62,152 (ii) Uncertified Contract Work (WIP) 8,75,27,876 - - - ....
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....as not required to explain the source of the source i.e. the details of purchases made by M/s Padmesh Realtors (P) Ltd., however the assessee company has obtained these details from M/s Padmesh Realtors (P) Ltd. and filed copies of sales invoices issued by these parties to M/s Padmesh Realtors (P) Ltd., confirmed copy of accounts of these parties in the books of M/s Padmesh Realtors (P) Ltd., Bank statement of M/s Padmesh Realtors (P) Ltd. Showing payment made to these parties and copy of IT returns, VAT returns & audited annual accounts of these parties etc. during the course of assessment proceedings, in support of genuineness of purchases made by M/s Padmesh Realtors (P.) Ltd. (d) That the allegations that assessee could not explain the actual address of M/s Padmesh Realtors (P.) Ltd. is completely baseless. At no point of time, the assessee company expressed its ignorance about the said Company. The address of M/s Padmesh Realtors (P) Ltd. was never sought by the Assessing Officer from the assessee company. In fact, the existence of M/s Padmesh Realtors (P) Ltd. was not only in the knowledge of the Assessing Officer but also within the knowledge of Investigation Wing of the ....
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....ce 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-110092 is constructed on a plot measuring 450 sq. meters. Infact the said Godown is constructed on a plot measuring 2000 sq mtrs. The said premises were used by M/s Padmesh Realtors (P) Ltd. for Godown purposes. In support of it the assessee company during the course of assessment proceedings has filed photocopy of NOC issued by M/s Kumar Ice Factory (P) ltd. to M/s Padmesh Realtors (P) Ltd for allowing use of said premises for Godown purposes; photocopy of MCD data relating to the said property showing area of the said premises as 2000 sq. meters; photocopy of Property Tax payment receipt and photocopy of Sales Tax documents (DVAT-07 & its annexures ) showing the said premises as Godown of M/s Padmesh Realtors (P) Ltd. in the records of Sales Tax Deptt. [Refer Page No. 38 to 50 of the Paper Book - A] That a perusal of these documents duly establishes the fact that M/s Padmesh Realtors (P) Ltd. had in his possession a warehouse (Godown) at 3, Patparganj Indl. Area, Delhi-l0092 on a plot admeasuring 2000 sq. Mtrs. which was....
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.... of the assessment order, the Assessing Officer has given his finding with regard to purchases made by M/s Padmesh Realtors (P) Ltd from M/s Shri Ganpati Sales. That in this 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 was given on rent to Mr. Pramod. She has also given the Mobile No. of Mr. Pramod. On making enquiry on the said mobile number, Mr. Pramod confirmed that M/s Shri Ganpati Sales was carrying on business from the aforesaid premises. That regarding the transfer of business premises by M/s Shri Ganpati ' Sales, it seems that the Assessing Officer has noted the incomplete address, the new address of M/s Shri Ganpati Sales was 110-112, 16/3 Abdul Aziz Road, Karol Bagh, New Delhi [Refer to page no. 1686-88 of the Paper Book - B relating to confirmed copy of account on which new address of M/s Shri Ganpati Sales has been given]. That the Assessing officer has missed to note down 16/3 prior to noting of Abdul Aziz Road. That even otherwise the finding of the Assessing officer himself proved that Mr. Pramod has confirmed that....
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....ny 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 & Invoice issued by padmesh (P) Ltd. to the assessee company and also on the accompanying copy of GR.'s/Bilty's annexed with each & every invoice, copies of which were duly filed during the course of assessment proceeding [Refer Page 169 to 871 of the Paper Book-A] and also discussed in reply dated 15.12.2010 during the course of assessment proceedings [Refer Annexure 'X'- Page 1 to 7]. Similarly, M/s Padmesh Realtors (P) ltd. had Godown at 3, Patpar Ganj Indl. Area, Delhi-110092 which was built on plot admeasuring 2000 sq mtrs, the relevant supporting documents were duly filed during the course of assessment proceedings.[Refer Page No.38 to 50 of the Paper Book-A]. Hence, the assessee company has duly discharged its onus with respect to disclosure of mode of transportation as well as discloser regarding place of warehouse maintained by M/s Padmesh Realtors (P) Ltd. (k)....
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....50 ITR 575 Delhi [Refer Page 1868 to 1870 of Paper Book -C). That the facts of the case given in the said case are different from the facts in the present case as detailed below:- (i) In the cited case the Assessing Officer has brought material on record to prove that the supplier has no means to carryon business and he is in employment with sister concern of the purchaser. No such fact exists in the present case. No material has been brought on record by the Assessing Officer to suggest that the suppliers of M/s Padmesh Realtors (P) Ltd. were its employee. (ii) In the cited case the bank account of the supplier was opened with the introduction of the purchaser whereas it is not so in the present case. (iii) In the cited case the goods were not accepted by the purchaser but was accepted by some irrelevant person whereas it is not so in the present case. (iv) In the cited case supplier has immediately withdrawn the payment from his bank account whereas it is no....
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.... the AO is bad in law and liable to be deleted on merits. For this proposition the appellant inter-alia relied on several decisions of the Hon'ble Supreme Court, the Delhi High Court and other High Courts, which are not being reproduced in order to avoid repetition. The assessee has also relied on the ratio of decision in Kishinchand Chellaram Vs. CIT(1980) 125 I.T.R 713 (SC) to contend that no adverse inference can be drawn against the assessee company on the basis of alleged recording of statements of third parties recorded at his back, as neither the copy of any such statement was provided nor any right to confront with the same was allowed to the assessee company. B. From the details filed by the assessee and referred to above it is clear that the assessee has discharged its primary and initial onus to substantiate the genuineness of the purchases made from M/s Padmesh Pvt. Ltd. by filing the various documents as referred above including the documents relating to the purchases made by M/s Padmesh Realtors Pvt. Ltd. from various parties. Further even during the course of search at appellant's premises on 25.09.08 no incriminating document was found with reference to t....
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....nce to the statements made by him." The substance of the above observation of the Hon'ble Supreme Court is that right to cross examination is required to be provided to the assessee before an adverse view is taken based on the statements/documents or any other evidence which is sought to be relied upon by the A.O. which is against the assessee. From the assessment order it is noted that the A.O. has noted that all summons issued to the parties from whom M/s Padmesh Realtors Pvt. Ltd. has made the purchases were received back unserved with the comment that no such company at the given address. However from the assessment order it is observed that this fact has not been confronted to the assessee or M/s Padmesh Realtors Pvt. Ltd. as seen from the assessment order of either of these assessees. Rather when the confirmed copy of accounts of these parties were filed by the assessee it was required on part of the A.O. to have asked for the production of the Managing Director or Principal Officers of these entities in case of M/s Padmesh Realtors Pvt. Ltd. if any doubt existed regarding the genuineness of these purchases. No such exercise has apparently been done. Thus the entire....
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....6/- by the appellant company from M/s Padmesh Realtors Pvt. Ltd, as this would prima facie result in distorted G.P. and material consumption figures in appellant's business. 5. Aggrieved by this, the Revenue is in appeal before the Tribunal. The hearing in the facts of the present case took place on two different dates namely 30th Jan. 2014 and 14th Feb. 2014 as both the sides in view of the detailed arguments on facts were required to file a synopsis encompassing the thrust of their respective arguments. The synopsis to be filed was directed to be first exchanged amongst the parties so as to ensure that the synopsis contains only what was argued and also to enable the parties to bring out anything which was either not addressed and referred to therein or anything which was referred to but ignored in the synopsis. Accordingly in terms of the direction the parties filed synopsis on 14/2/2014. The synopsis filed has been duly exchanged between them before 14th Feb. 2014. Whereas the synopsis filed by the Ld. CIT DR runs into 4 pages the Ld. AR filed a synopsis running into 34 pages which in lighter humour was referred to by the Ld. CIT DR as a compendium instead of a synopsis.....
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.... seen in the construction sector. * During the course of the search operation, a document AS 3SCN pages 102- 109 and another document AS-3, SCN pages 111 were seized from N-49, 1st Floor, Connaught Place, New Delhi, which is the corporate office. * During the statement recorded the assessee was initially unable to give the precise address of Padmesh Realtors Ltd., with whom it was doing business. Later on the address was given as A-102, Dream Apartment, Plot No 14, Dwarka, New Delhi. * Survey launched at the said premise on the same day revealed that it was under the ownership and control of one Mrs. Kamimi Gupta who denied any existence of such a company at the given address. She also stated that she was even unaware that any such company existed (page 4 of AOs order). * Godown address was given as Plot No. 3, patparganj Industrial Area, Delhi where a survey was launched. Person at the said premises, Shri Sanjay Agarwal, stated that no osuch company existed. * Both the above address was given by the assessee dur....
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....anifests that there was more than a proximate relationship between the assessee and the second (tier) parties. And are self serving documents. * Having proved that Padmesh Realtors or its suppliers did not exist on any address, the AO rejected the books of Account u/s 145. * CIT(A) in his order has relied heavily on the paper documents produced by the assessee and has overlooked entire field enquiries. He did not even ask the AO to conduct the enquiries if he thought that they were inadequate. * He has blindly followed Kishinchand Chellaram V CIT 125 ITR 713 (SC) for not giving opportunity to the assessee for cross examination. If the AO did not do so the CIT had enough powers of enquiry on his own or ask the AO to do so,. Reliance is placed on CIT V Sonal Construction 260 CTR (Del) 37 (Para20) and JCIT V Swarup Vegetable Products Industries 96 ITD 468 (Del)-Para 13. * CIT(A) has asserted that 'Source of Source' should be not be insisted upon by the AO. In fact in CIT Vs. N. R. Oortfolio 96 DT....
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....s running into 34 pages we deem it appropriate to record the oral arguments advanced and whenever necessary extract from the synopsis filed during the hearing. 7.2 In the course of his arguments the Ld. AR took us comprehensively through the show cause notice issued by the Assessing Officer and also the queries made by the AO in the course of the hearing. Addressing the replies of the assessee qua the queries made it was submitted that all information sought for by the AO was fully replied to by the assessee along with the detailed documents addressing the issues and supporting the replies made. These documents it was submitted are available on record by way of a paper book consisting of documents filed both before the AO and the CIT(A). These documents as such it was emphasized were available even before the AO who instead of passing his order considering them based his finding on his pre- conceived opinions resorting to some half hearted enquiries made by him and then selectively sharing half information with the assessee which resulted in passing of the assessment order which was challenged in appeal by the assessee. It was argued that before the Ld. CIT(A), it is the very same ....
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....jects Pvt. Ltd. Since the assessee company was executing contracts for M/S Suncity Projects Pvt. Ltd and its other group companies, under the contract arrangement material supply was made to the assessee company by M/s Padmesh Realtors Pvt. Ltd. All the documents/explanation were duly filed in support of the functioning of M/s Padmesh Realtors Pvt. Ltd and also relating to purchases made by M/s Padmesh Realtors Pvt. Ltd for supplies made to assessee company. All the purchases were made by M/s Padmesh Realtors Pvt. Ltd from dealers who were registered with VAT, all the payments were made by M/s Padmesh Realtors Pvt. Ltd to these parties were through account payee cheques only. Copy of all the documents relating to purchases made by M/s Padmesh Realtors Pvt. Ltd and payments thereof were duly filed during the course of assessment proceedings. In spite of the facts that all the purchases made were genuine and the assessee company has discharged its onus, the Ld. Assessing Officer has treated these purchases as bogus without any reason whatsoever. There was no valid/legal reason for treating these purchases as bogus by the Ld. Assessing Officer. 7.5. A perusal of page two of the syn....
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....course of the post search investigation had enquired regarding the subscribing of Compulsory Convertible Debentures of Padmesh Realtors (p) Ltd by Deutsche Bank AG Singapore amounting to Rs. 600 crore. Apart from this it was argued that in regard to Padmesh Realtors AO has examined this issue and found no adverse material. However, in the facts of the present case it was argued ignoring these material facts on record available with the department itself inferences on half carried out enquiries are relied upon by the department. Accordingly it was his submission that the existence of Padmesh Realtors was never in dispute. 7.7. Addressing the issues one by one assailing the reliance placed on the statement of Mrs. Kamini Gupta owner of Flat No. A-102 Dream apartments, Dwarka the copy of NOC issued by the said lady to M/s Padmesh Realtors permitting the said concern to use the premises for business purposes was relied upon. It was submitted that the same has not been assailed by the Revenue. It was submitted that the statement of Mrs. Kamini Gupta was never confronted to the assessee by the AO. Similarly opportunity to confront her for cross- examination was also never provided. ....
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....data relating to the said property demonstrating that it had 2000 square meters available to it which was used by M/s Padmesh Realtors P. Ltd on receiving the NOC from Kumar Ice Factory Pvt. Ltd. The Sales Tax Registration Documents (DAVT)-07) it was submitted clearly demonstrates that the said premises was a go-down of M/s Padmesh Realtors P. Ltd was at Patparganj Industrial Area. These evidences in the face of the suspicion of the Department it was submitted cannot be ignored as they demonstrate the identity and existence of M/s Padmesh Realtors P. Ltd. 7.11. Addressing the issue of purchases made by M/s Padmesh Realtors P. Ltd it was vehemently argued that the assessee during the course of the assessment has led all possible evidences in support of its claim. Referring to the manner in which the AO has proceeded attention was invited to page 3 & 5 of the Assessment Order wherein the AO has made a mention of 23 parties from whom M/s Padmesh Realtors P. Ltd had made purchases. Inviting attention to page 7 & 8 of the assessment order it was submitted that the AO has discussed the enquiry conducted by the Investigation Wing in respect of only 3 parties out of 23 namely:- (i) R. V....
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....to June 2007. The said Shri Pramod it was submitted even as per to the assessment order had responded on that phone and had stated that his company had shifted to 110-112, Abdul Aziz Road, Karol Bagh. The said address as per the assessment order it was submitted was found to be an incomplete address. Referring to the assessment order in the context of the factual findings recorded therein, it was submitted that the enquiries demonstrate that the said premises was rented to Mr. Pramod whose mobile no was provided to the department. The assessment order also shows that the Mobile Number provided was responded to by Sh. Pramod who had provided the latest address to the department. It was submitted that no doubt the address was found to be incomplete however this fact does not lead to the conclusion that the said concern was not in existence and in-fact affirms the conclusion that the concern was in existence, only it could not be located the address was found to be incomplete. Referring to the assessment order it was submitted that no effort was made to get the complete address from Shri. Pramod. The complete details of the said concern it was submitted are available at Page 1652 to 1....
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..... None of these evidences it was submitted has been rebutted by the Revenue. Cognizance of these facts it was submitted has been taken by the CIT(A) at page 48 and it is only after taking these documents into consideration the issue of genuineness of purchases made by M/s Padmesh Realtors P. Ltd and M/s Sai Traders has been accepted . In these circumstances it was his submission that the assessee has fully discharged its onus and there is no material available on record in support of the inferences drawn by the AO who has merely referred to enquiries conducted during the search and made no effort to further enquire after receiving the reply and evidences of the assessee. 7.16 Addressing the issue of transportation of goods in regard to which Ld. CIT DR has made oral arguments it was submitted that the said issue has been discussed at length by the CIT(A) himself in para (j). Referring to the said para it was submitted that the AO has inferred that M/s Padmesh Realtors do not have their godown facility to store the material and have failed to exhibit the mode of transport of goods. Referring to the finding of the impugned order it was submitted that the mode of transportation has....
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.... was submitted that infact the observations of the AO confirmed the existence of the claim of genuine supplies and the genuineness of the transaction. A perusal of the observations of the AO it was argued shows that the AO has made inquiries from the bank accounts of the suppliers wherein the bank accounts were found to be correct and in the absence of any adverse fact the payments made by the assessee to Padmesh Realtors who further made payment to their suppliers whose accounts have also been seen and who too have further paid other parties wherein nothing adverse has been found. It was argued clearly shows that there is no cash movement and all the payments have been made through cheques. This very fact noted by the AO it was argued proves the existence of the suppliers who were all genuine. 7.19 Addressing the observation that summons have been issued and not been served. The Ld. AR through his submissions in the synopsis submitted that firstly no such material was confronted to the assessee at any point of time throughout the assessment proceedings and infact in the order sheet there is no reference to any such requirement and the AO has just made this remark in the assessment....
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....cheques have been examined and nothing adverse has been found. As such the departmental claim it was argued is based on presumption. 7.20.2 Addressing the so called exponential growth in 45 days it was argued that there is nothing abnormal in making purchases of Rs. 24 crore between 16th Jan. to 31st March the period is about 75 days and not 45 days as M/s Padmesh Realtors Company is a subsidiary of Sun City Group in the construction business and as per arrangements the goods had been purchased by the assessee from it. It was submitted that it is not an exponential growth in the construction sector as it is a question of construction material purchased by the assessee company which was engaged in the execution of projects which it constructed. 7.20.3 Addressing the document found in the search it was submitted that infact it demonstrated that the transaction was genuine and the document was a document which could be found in the ordinary course of the business from its premises and it no way shows that any cash has been paid or received or any accommodation entry has been entered into. It was argued adverse inferences have been drawn without any documentary evidence. As the d....
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....the companies and the transaction being genuine as there is no allegation that any cash has been withdrawn from the bank. 7.20.7. Addressing the allegations of the AO in regard to the existence of registered office of Padmesh Realtors at residential addresses in regard to which NOC had been issued by the owner of the flat Mrs. Kamini Devi to M/s Padmesh Realtors which has been ignored by the Revenue. It was submitted that the NOC was a requirement of the Sales Tax Authorities which has to be met before Registration is granted taking note of the premises from which the entity seeking Registration would operate. consequently after filing this document an inspection is carried out by VAT Inspector who visits the premises and reports the statement of the persons therein and only on the confirmation that the applicant is operating from that address the registration is granted. In the facts, it was argued M/s Padmesh Realtors has got VAT Registration evidenced from Registration Certificate placed at page 27 issued by the said Statutory Authority wherein the address is A-102, Dream Apartment, Plot No-14, Sector-22, Dwarka, Delhi. 7.20.8. Addressing the carrying out of commercial act....
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....ased on presumption that its suppliers were not inexistence then what is wrong if the assessee seeks the help of its supplier and asks it to make the documents and evidences to demonstrate that these purchases were genuine available to it. These documents it was argued are substantive documents and merely on suspicion they cannot be disregarded. The claim it was submitted has been supported by copies of returns filed documents of registration of the concerns with Registry of Companies; filing of return with the VAT Authorities, etc. It was contended that the AO has not brought any evidence to support the conclusion that the suppliers were not in existence. It was argued that investigation was made only in regard to three suppliers by the Investigation team and not by the AO and these too were also incomplete enquiries and were fully rebutted by the assessee by way documents on record which have not been assailed. 7.20.11 It has further been contended vide para 16 of the synopsis that the issuance of summons recorded by the AO has never been confronted to the assessee. Reliance was placed upon the letter dated 23.12.2010 filed before the AO. 7.20.12 Vide para 17, the rejection....
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....ided for further examination of these documents and also the statement recorded during search. It was a case where any positive material was led by the assessee in support of its contention. In the present case, the assessee has led positive material about genuineness of the purchases about which no fault has been found. As against the evidences referred by the AO in the assessment order the assessee has rebutted each and every allegation and CIT(A) having considered the same has given a finding in favour of the assessee. Thus it is not a case where the assessee has not led evidence in support of its contention. The CIT(A) has given a finding based on the documents and evidences submitted by the assessee, which the AO could not rebut or find any fault with it. Thus this judgment is also not relevant for the issue. 21. As regards the judgment of JCIT vs. Swarup Vegetable Products Industries 96 ITD 468 (Del) relied upon it is submitted that the facts of that case were entirely different. In that case assessee has sold machinery for a sum of Rs. 20 Lacs to one M/s AS. Engineering Works. The written down value of such machinery was only Rs. 42,350/-. The AO asked the assessee to pro....
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....t verified and nothing adverse was found." 7.20.15. Similarly reliance upon CIT vs N.R. Portfolio 96 DTR 281 (Del.) by the Revenue was also stated to be misplaced on the following grounds:- 22."Reference to the judgment of the Delhi High Court in the case of CIT vs NR Portfolio 96 DTR 281 (Del) is also misplaced and irrelevant. In the said case the assessee has not at all cooperated in the assessment proceedings and in fact the assessment proceedings were completed exparte under Section 144 of the Act. In this background the Court has observed that assessee has blocked the investigation at each and every stage and on that basis drawn adverse inference. The facts of the present case are entirely different. The assessee has cooperated during assessment proceedings and in fact has led all evidences as called for by the AO. It is not the case of the AO and the revenue that assessee has failed to file any document or information which was called for from it Further it is not a case where even the AO has verified source of source as is evident from para 4.8 of the assessment order where the AO has ....
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....gorical finding that the assessee having made complete account, purchase book, sale book, all payments for purchase having been made by cheques no adverse inference can be drawn about the purchases being made by the assessee. It was the case of purchases as is the case of the assessee company. 7.20.18. In the synopsis filed the distinction drawn by the Revenue in the case of Fair Finvest Ltd. 357 ITR 146 (Del) was assailed on the reasoning that field enquiries therein were carried out by the AO and in the facts of the present case have been carried out by the Investigation Wing. 7.20.19. It has also been submitted vide paras 26 & 27 of the synopsis that the allegation that only proper paper work and documentation has been done comes infact to support the case of the assessee as none of the field enquiries prove that the purchases were not genuine and infact the evidence clearly establishes the case of the assessee. None of the material and evidence have been rebutted as not only M/s Padmesh Realtors is in existence but it also filed by way of its return substantial income which has been accepted. Each supplier of Padmesh Realtors as per evidence not rebutted is in building li....
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....contents of its showed that it was a ledger account of M/s Padmesh Realtors in the books of the assessee. The said document showed that sales had been made by the said concern to the assessee on various dates for which payments had been received. Copy of the document has also been reproduced at page 2 of the AO and has been extracted in the earlier part of this order. It is seen that as a result of the enquiries made at the office address and go-down premises of M/s Padmesh Realtors the AO not only doubted the existence of the company but also doubted the transactions of the assessee with M/s Padmesh Realtors as further enquiries made from three specific companies led him to the conclusion that the companies were formed with the motive to provide accommodation bills. Specifically M/S R. V. Mercantile Pvt. Ltd; M/s Shri Ganpati Sales & M/s Sai Traders were enquired into as no replies were stated to be received from the 23 Companies except one i.e Ishwar & Sons Timber Traders. Accordingly he was of the view that neither the purchases made by M/s Padmesh Realtors is correct nor has anything been sold to the assessee. He further took into consideration the fact that the mode of transpo....
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.... assessee's claim as none of these were found at the address given. The fact that photocopy of VAT return filed, Bank Statements PAN return of income ROC etc for the 23 entities filed during the assessment proceedings without being specifically called for by the AO it has been argued suggests close proximity between the assessee and M/s Padmesh Realtors as such it was stated to be a neutral evidence as such of no relevance. The signatures appearing in the paper book in the case of the suppliers of M/s Padmesh Realtors specifically M/s Shiv Trading Comapny also did not inspire any confidence and the capability of the assessee in submitting these various details of these 23 concerns from whom the alleged purchases were made by Padmesh Realtors showed that there was more than proximate relationship between the assessee and the second tiered party. The reliance placed by the CIT(A) on these paper documents accordingly it has been argued is misplaced as he has over looked the entire field enquiries which demonstrated that all the suppliers were bogus suppliers. 8.1 As opposed to these submissions of the Department the assessee has placed heavy reliance on the documents available ....
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....statement of Mr. Kamini Gupta owner of Dwarka flat and of., Sanjay Aggarwal a stranger were stated to be of no relevance. It has also been argued that at no point of time the assessee company expressed its ignorance about the address of M/s Padmesh Realtors as the said address was known to the Assessing Officer himself from day one and was also in the knowledge of the Investigation wing who in the course of the post search investigations investigated the subscribing of CCD of M/s Padmesh Realtors by Deutsche Bank amounting to Rs. 600 crore. It has been stated that the issue has been examined in the course of the assessment proceedings by the Assessing Officer and found to be genuine as such the existence of the said concern has never been in dispute at any point of time. These submissions are found recorded in the impugned order and from part of the synopsis filed before the Bench and it is seen that these have not been assailed by the Revenue. In support of the existence of the said concern reliance has been placed upon Memorandum of article of association; Certificate of incorporation issued by ROC, photocopy of PAN Card; photocopy of registration of certificate issued by VAT Dep....
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....d Floor), Kachcha Mahajni, Chandni Chowk, 110006 w.e.f 2/3/2009 at the said concern as per sub para c of para 4 has been described as a subsidiary company of M/s Sun City Projects w.e.f 22/11/2007 in these facts, the statement not confronted of Mrs. Kamini Gupta has no relevance in the absence of any evidence to the contrary. It is also seen that the factum of Padmesh Realtors having been examined in the content of CCD of Rs. 600 crore Deutsche Bank, Singapore has already been in the knowledge of the AO and Investigation Wing. This fact cannot be ignored as the existence was in the know of the department all along the fact coupled with documents of Statutory Authorities; coupled with NOC filed for Registration purposes of Mrs. Kamini Gupta conclude this issue against the Revenue in the absence of any rebuttal on facts and evidence. In the circumstances, being satisfied by the findings of the CIT(A) and the reasoning for coming to the said conclusion the same is upheld. 8.3 Coming to the next issue namely the availability of go-down facilities to Padmesh Realtors for the purposes of storage of its material, it is seen that the only evidence on record is the statement of an unconc....
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....ook and find that they include the necessary details of address, TIN; date of sales; dispatch detail i.e mode of transportation; dispatch no., bilty no; description of goods; quantity rate etc sales tax charged, freight/carriage charge etc. Cognizance of this fact has been taken note of by the CIT(A) and on a perusal of the documents filed in the paper book we find that the allegation of the revenue is without any basis. 8.5. It is a matter of record that the assessee and the Sun city Group of companies were subjected to search and nothing incriminating except these two documents qua the assessee have been found. Whereas the "Core document" described is a ledger account of M/s Padmesh Realtors in the books of the accounts of the assessee it is seen it merely reflects the sales made by the said concern to the assessee on various dates for which payments have been made, we do not see how this document creates any doubt that the transaction is bogus in the face of the evidences and the enquiries and the responses available on record. Coming to the other document i.e AS-3 party SCN Page 111 which again discloses that purchases of 24 .25 crore odd were made by M/s Padmesh Realtors fr....
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.... claim cannot be disregarded on the basis that at the premise where enquiries were carried out for M/s Shri Ganpati Sales and M/s Sai Traders the ladies found in occupation of the premises namely Smt. Rekha Sachdeva and Smt. Kamlesh Devi both have agreed that the respective firms had functioned from the said premises but now had moved to some other location. As such the existence of the firms was confirmed by the AO's evidence itself whereas in the case of M/s Shri Ganpati Sales, Mobile No of Shri Pramod was given as the lady had the number available which was called and responded to by the said person. In the cases of M/s Sai Traders it was stated that the said premises was given on rent to M/s Sai Traders about 16 years ago and the present address was not known. It has been argued what stopped the Revenue for calling Pramod Kumar once again for a full and correct address if the initial noting of the address was incomplete and in the case of M/s Sai Traders it was argued that there is no duty of the landlord to necessarily know where a tenant firm has shifted and even otherwise in the case of M/s Sai Traders the assessee has placed on record copy of the income tax return for 2....
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....to the conclusion that the purchases made by Padmesh Realtors were genuine and from genuine concerns. The CIT(A) takes note of the fact that there is no allegation that money has come back to the assessee and nothing contrary to the same has been brought on record by the Ld. CIT DR. As such, we find no good reason to interfere with the impugned order in this regard. It is seen that the documents available on record before the AO filed in assessee's letter dated 15/12/2010 stands unassailed. The same have been stated to have been considered by the AO in para 4.6 however inordinate reliance has been placed on post search record enquiries carried out half heartedly by the department and the documents relied upon by the assessee and considered by the CIT(A) cannot be dismissed as neutral documents only on the ground that they were never specifically called forth by the AO and having been filed before the AO suggests close proximity. The documents it is seen are positive document demonstrating the genuineness of assessee's claim as such cannot be described as neutral only because the assessee filed them suo motu. Addressing the allegation of close proximity we see no merit in th....